Global banks warned against race for Basel III
Frankfurt, September 23, 2010
Deutsche Bank's chief executive warned the world's banks not to embark on a "dangerous race" to fulfil new bank capital rules early, which he said could choke off the supply of loans to the real economy.
"It's important for us to coordinate globally. Otherwise a race to the top will cause balance sheets to be cut and the credit supply to be constrained more than anticipated," Josef Ackermann said at a banking conference on Thursday.
Banking regulators and central bank officials from across the world met earlier this month to finalise their Basel III package of tougher bank capital and liquidity rules.
Bankers have lobbied regulators to delay the implementation of new capital requirements for fear that hasty moves to bolster banks' capital positions could stifle their ability to keep the economy supplied with loans.
Ackermann said it became clear to him after conversations with investors that they had started to put pressure on the industry to fulfil the Basel requirements as soon as possible.
He said last week Deutsche Bank would fulfil Basel III capital requirements by 2013 rather than 2019 as set out by the rules. - Reuters