Bank standards ready by 2013
(9 September 2010 – Europe) German central bank leaders have said that stricter international banking standards may be ready earlier than expected and should not affect the wider economy.
The need for banking standards to be stricter and reinforced became clear after the collapse of Lehman Brothers in September 2008 and subsequently the global financial crisis.
Franz-Christoph Zeitler, Germany’s central bank’s vice president, said after a meeting of the Basel Committee on Banking Supervision that a compromise had been reached on fundamental issues.
Another meeting between central bank governors and financial market regulators has be scheduled for the end of the week to pin-point a minimum level of capital and cash reserves that banks will need to adhere to, to avoid another global financial crisis.
Mr Zeitler said that since the beginning the central bank has sought to ensure balance between reinforcing the stability of the international financial system without stemming credit flows to the wider economy.
The central bank’s vice president added that the solution may lie in higher levels of core capital, coupled with a ‘capital cushion’.
These measures would progressively be introduced starting 2010, Mr Zeitler added.
Alex Weber, the central bank’s president and also a member of the European Central Bank, said that stricter banking standards for capital and cash reserves wouldn’t burden economic growth, as long as there was a generous period of transition.
Franz-Christoph Zeitler, Germany’s central bank’s vice president, said after a meeting of the Basel Committee on Banking Supervision that a compromise had been reached on fundamental issues.
Another meeting between central bank governors and financial market regulators has be scheduled for the end of the week to pin-point a minimum level of capital and cash reserves that banks will need to adhere to, to avoid another global financial crisis.
Mr Zeitler said that since the beginning the central bank has sought to ensure balance between reinforcing the stability of the international financial system without stemming credit flows to the wider economy.
The central bank’s vice president added that the solution may lie in higher levels of core capital, coupled with a ‘capital cushion’.
These measures would progressively be introduced starting 2010, Mr Zeitler added.
Alex Weber, the central bank’s president and also a member of the European Central Bank, said that stricter banking standards for capital and cash reserves wouldn’t burden economic growth, as long as there was a generous period of transition.
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