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November 5, 2011US banks "to unveil new capital rules"
Cannes, France: US banks, many of which have resisted current capital rules, will have to comply with tougher new legislation aimed at preventing another financial crisis, a top regulator said on Friday.
"All the evidence we have from the US government, from the US Federal Reserve which is ultimately responsible for introducing regulation about Basel III... is that they will introduce Basel III and will implement it," said the exiting head of the Financial Stability Board, Mario Draghi, who is the new chief of the European Central Bank.
Many US banks have not even implemented the Basel II regulations, which were published in 2004 and have been adopted by their European counterparts.
Fed official Daniel Tarullo said Friday that the US central bank "should soon" be able to draft the regulations necessary for implementing the final part of Basel II. read more about Daniel Tarullo on Executive Compensation (He is the author of Banking on Basel: The Future of International Financial Regulation) ...
As for Basel III, the next stage to be implemented over six years beginning in 2013, Tarullo said in a speech in Washington that he "would expect a proposed regulation in the first quarter of 2012,
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"While the Federal Reserve intends to ensure that firms are on a steady path to full Basel III compliance, we do not intend to require firms to raise external capital or reduce their risk-weighted assets in order to meet any target earlier than at the time specified in the Basel III transition schedule," Tarullo said.
Tarullo, a member of the Fed's board of governors, is particularly involved in financial system regulation issues. read more about Daniel K. Tarullo, a Star Regulator at the Fed ...
Adopted in September 2010, Basel III requires banks to raise their high-quality core capital to 7.0 per cent of total assets from the current 2.0 per cent.
Big US banks criticise the new rules as overly tough, with JPMorgan Chase chief executive Jamie Dimon suggesting the US should reject the Basel accords.
JPMorgan Chase was one of 29 global banks, nine of them from the United States, designated on Friday by the Financial Stability Board as systemically important financial institutions and so required to hold a higher level of capital under Basel III. read more G-20 Labels Eight Top US Banks as SIFIs (Too Big To Fail) ...
The so-called SIFI banks -- judged as those which could damage the global financial system if they failed -- will have to set aside an extra 1.0-2.5 per cent of assets for Tier 1 capital, on top of the Basel III standard.
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Also .. Links ~ Banking on a nation ... Volcker ...
