Australian banks unfazed by tough new rules

[depakid]

Source: Sydney Morning Herald

Australian banks have avoided the need to raise additional funds as they easily meet the tough new rules on capital requirements set down by global regulators overnight. Under political pressure to rein in banks’ risk-taking, regulators have been tightening capital rules and introducing new measures such as liquidity requirements.

Overnight, regulators from 27 nations more than doubled their capital requirements for banks, giving lenders as long as eight years to comply in full, as part of efforts to prevent future financial crises. Deutsche Bank analyst James Freeman said the new rules remove some of the uncertainty that has been hovering over the bank sector.

‘‘Australian banks are already above the requirement and there will be no need for capital raisings,’’ Mr Freeman said. Indeed, with higher levels of capital than European counterparts, this increases the chances Australian banks could eventually return some capital to shareholders in the form of share buybacks or special dividends, although this will be over several years.

...The new rules and ratios are the strictest since nations began regulating the global banking system together in 1974 and will force some European banks to raise additional capital.

Read more: http://www.smh.com.au/business/local-banks-unfazed-by-tough-new-rules-20100913-157t9.html

[denem]

1. "nations began regulating the global banking system together in 1974"

One for you, one more me, one for Rupert and two for Citi ...

[mackerel]

2. The Australians and the Canadians

seem to have faired well over all in the past two years. Isolated pockets of high unemployment in Alberta but overall they're doing o.k.

[Safetykitten]

3. Strict? I think the numbers were 98% to a very "strict" 93% over a decade.