WHAT IS YOUR REACTION TO THE NEW BASEL III REQUIREMENTS IMPOSED ON BANKS?

 
Marc Sidwell
Follow Marc
ADAIR TURNER |
FINANCIAL SERVICES AUTHORITY

The agreement announced today amounts to a major tightening of global capital standards and will play a significant role in creating a more resilient global banking system: the transition timescale will ensure that banking systems can play their role in supporting economic recovery.

DAVID GRINSZTAJN | ALPHAVALUE

The counter-cyclical capital buffer is purely cosmetic and will be left under the watch of domestic regulators. Everything that is not compulsory is useless since regulators are worried about being the first to enforce a measure that could introduce a competitive disadvantage for their domestic banks.

NIC CLARKE | CHARLES STANLEY

If the banks have to hold more capital this will have two major impacts. First, the impact on economic growth is likely to be negative as banks will have to with-hold more capital from borrowers. Also, with banks holding more capital, other things remaining equal, returns on capital for investors are likely to diminish. Therefore, Basel III cannot be seen as wholly positive.