Basel creates choppy growth
(11 October 2010 – Global) A report by the Institute of International Finance has shown that measures to tighten banking regulations in some jurisdictions are compromising lenders ability to fuel the economic recovery.
The report indicated that the global recovery has been threatened by a fragmented approach to rule-making and regulatory "add ons".
Additional capital requirements imposed by the Basel Committee could trim growth by up to 3.1 percentage points over the next five years and in addition cost ten million jobs, many banking associations believe.
Peter Sands, chief executive of Standard Chartered Bank, told The Australian that if it was assumed that the recent Basel proposals are implemented without add-ons and shortened timetables, then the economic costs could be moderated to some degree, although they will still be significant and a source of concern.
But we also need to take into account a raft of additional proposals, Mr Sands added.
However, the Basel Committee, which governs world banking regulation, says that the cost to GDP of tougher rules is about an eighth of the institute's estimate.
Additional capital requirements imposed by the Basel Committee could trim growth by up to 3.1 percentage points over the next five years and in addition cost ten million jobs, many banking associations believe.
Peter Sands, chief executive of Standard Chartered Bank, told The Australian that if it was assumed that the recent Basel proposals are implemented without add-ons and shortened timetables, then the economic costs could be moderated to some degree, although they will still be significant and a source of concern.
But we also need to take into account a raft of additional proposals, Mr Sands added.
However, the Basel Committee, which governs world banking regulation, says that the cost to GDP of tougher rules is about an eighth of the institute's estimate.
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