Rationalising ratios

21 September 2009 By Nicholas Paisner

The continent s bankers are up in arms about proposed new capital rules. They claim they will be unfairly disadvantaged visàvis US banks. Harmonizing regulation will require change on both sides of the Atlantic, but Europe s lenders may find it harder to adapt than US peers.

This content is for Subscribers only

Context News

On 5 September, the G20 Meeting of Finance Ministers and Central Bank Governors agreed that measures requiring banks "to hold more and better quality capital," as well as a leverage ratio, would be included in a new framework of global regulation.

On September 7, the Bank for International Settlements elaborated on these points in its statement on banking reform. The Group of Central Bank Governors, which oversees the Basel Committee on Banking Supervision, agreed to work to "raise the quality, consistency and transparency of the Tier 1 capital base" and "introduce a leverage ratio as a supplementary pillar to the Basel II riskbased framework with a view to migrating to a Pillar 1 treatment."

Email a friend

Please complete the form below.

Required fields *