Basel Committee gets tough on world banks to avoid another crisis
Banks have lobbied hard to water down new regulatory updates, warning they make it harder to lend to businesses
London — A decade since Lehman Brothers bank collapsed, the world’s top lenders largely meet tougher capital requirements aimed at averting a repeat of the ensuing markets meltdown, regulators said on Thursday. The Basel Committee on Banking Supervision said that, as of December 2017, the world’s 111 biggest cross-border, or “Group 1”, banks would have had a collective capital shortfall of only €25.8bn had all Basel’s rules been in force, a fraction of their earnings. The overall core equity capital ratio, which measures capital to risk-weighted assets, would have risen to 12.9% from 12.5% in June 2017, roughly triple pre-crisis levels. Basel has published regular updates on compliance with the tougher capital rules introduced in the aftermath of the crisis, but the latest assumes that a final batch of requirements agreed only last December are also in force. The minimum versions of these additional rules won’t become mandatory until January 2022, but Thursday’s figures show banks a...
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