Bank reform: the regulators agree
After months of negotiations, the Basel Committee has established a new international regulatory framework for banks. The device signed by 26 of the 27 member countries of the committee shall enter into force early 2012. Only Germany still dragging feet and abstained from voting certain amendments. The reform is focused particularly on increasing requirements for capital adequacy, liquidity, debt and reserves to help banks get through another crisis proportions.
Among the new regulations, the Committee plans to incorporate a ratio called leverage ratio between equity and liabilities reported in the bank. Between 2013-2017, the ratio set at 3% minimum will not be binding. Then starting in 2018 a leverage ratio has to adhere to be defined."Today's agreements represent a landmark achievement in the context of strengthening the soundness of the banking sector," commented the President of the European Central Bank Jean-Claude Trichet cash advance loan no fax.
Adjustments favorable to France
However, some proposals have been postponed. Banks will include the possibility of taking into account, in part, capital of insurance subsidiaries in the calculation of bank capital, a relaxation which household particularly French establishments. Furthermore, the position of the United States, which have still not applied the rules of Basel II in 2008, raises doubts. "We're not sure they apply the rules in the same terms as European banks," said Baudouin Prot, BNP Paribas boss, in an interview with Le Figaro.
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