Is it the end of national banking rules? Preparing for Basel III

Sept. 1, 2011 - PRLog -- Financial institutions face demands from the European Union (EU) to more than triple the minimum levels of core capital they must hold to protect against insolvency, though many believe the new law will hamper Europe's economic recovery.

The proposal comes from the EU's financial services chief Michel Barnier and seeks to implement rules approved by the Basel Committee on Banking Supervision that aim to make banks more resilient to sudden market change. In order to comply with the EU's version of the Basel III rules, it is thought that lenders will need to raise approximately €423 billion (£370 billion) over the next four years.

The details of Barnier's proposal are unlikely to shock the industry, however, as he is obliged to follow the precedent of Basel, backed by world leaders in 2010, or else face a backlash from the US.

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