Daily Management Review

Germany supports updated Basel III


11/16/2017


German regulators are supporting a compromise over the adoption of new global rules of banking aimed at avoiding the recurrence of the financial crisis of 2007, their representative said, quoted by Reuters.



Andreas Praefcke
Andreas Praefcke
The rules known as Basel III are already 10 years old, and recent efforts to reach agreement have been hampered by resistance from Germany and France regarding the establishment of a minimum capital requirement for large banks that use their own models to calculate risk.

However, Andreas Dombret said that German Bundesbank and chief financial controller BaFin supported the last offer on this "output floor", even it was "nothing but the desired result."

A compromise means that the bar will be set at 72.5% of the bank's capital, which a bank must keep in a more rigid model set by regulators, compared with 75% initially stipulated, Dombret said.

"A possible compromise with a minimum threshold of 72.5% is nothing more than the desired result for Germany," Dombret said. "But the failure due to the 2.5 percentage points agreed by BaFin and the Bundesbank will not be justified".

source: reuters.com






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