World Panel Backs Rules to Avert Banking Crises

[discocrisco01]

Source: New York Times

BASEL, Switzerland —Top central bankers and bank regulators agreed Sunday on far-reaching new rules for the global banking industry that are designed to avert future financial disasters, but could also dampen bank profits and strain weaker institutions.

Officials confirmed that the panel of financial authorities from 27 countries had reached agreement Sunday afternoon and would release details later Sunday. The group includes Ben S. Bernanke, chairman of the Federal Reserve, and Jean-Claude Trichet, president of the European Central Bank. If ratified by the G-20 nations later this year, the rules, known as Basel III, will require banks to bolster the amount of low-risk assets they hold in reserve as a cushion against market shocks. While the American Bankers Association and other groups have complained about the provisions, other bankers said the rules will help avert crises of the kind that nearly plunged the world into depression in late 2008.

“Banks will unarguably be safer institutions,” said Anders Kvist, head of Treasury at SEB, a bank based in Stockholm which has operations around Europe.

Analysts had expected the group to sharply raise the most bulletproof category of reserves, known as core Tier 1 capital, to about 8 percent of bank assets from as little as 2 percent under current rules.

Read more: http://www.nytimes.com/2010/09/13/business/global/13bank.html?src=busln

[billlll]

1. yet another bandaid when major surgery is needed n/t

Nt

[Downwinder]

2. Take two aspirin n/t

[DJ13]

3. I thought everything was fine with banks

So where did those trillions end up, anyway?

[Hosnon]

4. "... but could also dampen bank profits ...."

:cry:

:sarcasm: