Basel plans new capital rules for national banks

Elizabeth Fournier
BANKS considered nationally important will have to hold more capital than their smaller counterparts from 2016 onwards, the Basel Committee for Banking Supervision said yesterday.

But the global watchdog said it would leave the question of how much more the domestic systemically-important banks should hold up to individual national regulators.

The new rules are designed to protect domestic economies from the collapse of one of their big banks, and could affect about 50 banks in Europe and between 100 to 200 globally.

“The failure of such a bank could have a much greater impact on its domestic financial system and economy than that of a non-systemic institution,” the committee said yesterday.

Many countries’ institutions will already meet the higher demands, after national regulators spent the last few years beefing up capital rules in the wake of the financial crisis.

The framework published yesterday called for national authorities to “establish a methodology for assessing the degree to which banks are systemically important in a domestic context” and then set capital ratios that “reflect the potential impact of ... a bank’s failure”.

Meanwhile reports yesterday suggested that the EU may already be considering pushing back the January deadline for member states to apply incoming Basel III rules, which will mean banks across the world must hold core capital buffers of at least seven per cent of risk-weighted assets.