Basel rules will hit world growth

TOUGH new rules forcing banks to set aside funds to combat future financial crises could slash world economic growth by as much as one per cent a year.

Chairman of the Basel Committee on Banking Regulation Nout Wellink told the Financial Times that regulators are determined to push through the legislation despite repeated warnings from within the industry.

Wellink says the potential benefits in the face of another financial meltdown far outweigh the unpalatable immediate effects.