Top regulators say new Basel III regulations are not yet enough

INCOMING rules on banks’ capital and liquidity levels are still not enough to make the financial system secure, a top regulator behind the Basel III rules warned yesterday.

“Basel III is necessary, and banks are reasonably well positioned to meet the new capital requirements – but it is not sufficient,” said Wayne Byres, secretary general of the Basel Committee on Banking Supervision, arguing more rules are needed on liquidity ratios, trading book controls, securitisation and the large exposure regime.

He said the committee needs to make sure the rules are all properly implemented and supervised if they are to work as planned.

But he added that there are several areas the Committee needs to study further to come up with further regulations.

“We have embarked on a fundamental review of the trading book rules, given that activity in this area was a major source of the problems that led to the financial crisis,” he said. “We expect to issue more detailed proposals, and undertake an impact study, during 2013.”

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