Wednesday, April 17, 2024

Banks want capital cushion

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GENEVA (AP) – A panel of central bankers, regulators and officials is proposing new rules that would require 30 of the world’s largest banks to hold vastly greater capital as a cushion in case of losses.

The Basel, Switzerland,-based Financial Stability Board says its proposal would not take effect until 2019 at the earliest and is meant to prevent a repeat of the 2008 global financial crisis by creating a common international standard for the “total loss-absorbing capacity” of global systemic banks.

The FSB said in a statement today that its proposals are a response to Group of 20 concerns.

One proposal could more than double the current requirement that banks hold capital buffers equivalent to at least seven per cent of risk-weighted assets by 2019.

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