Basel III a major step forward

13 September 2010 - The agreements reached yesterday by the Basel Committee on Banking Supervision help to make the financial markets more stable and significantly reduce the risk of new crises. “The proposed new capital standards are a major step forward”, said Manfred Weber, Chief Executive of the Association of German Banks. “It is a good thing that the route has now been set, even if we don’t believe that every single measure is appropriate.”

In Mr Weber’s view, the new, stronger capital requirements, which are also to be seen in connection with the much stricter definition of capital and other arrangements, pose considerable challenges for banks. Banks would have to do everything necessary within the transitional period to meet these requirements. While the new standards were ambitious, he said, Germany’s private banks would, overall, be able to implement them – even though this would require substantial efforts on their part.
The new banking rules could, however, only unfold their full effect, Mr Weber added, if they were introduced on a globally harmonised basis. The Association of German Banks called on governments to agree an internationally coordinated phase-in period at the Seoul G20 summit in November so that they are introduced simultaneously in all countries.