Barry Sotero, AKA, Obama-Pushes For “Global Rule” On Bank Capitol

Wednesday, May 26, 2010
By Paul Martin

Regulators Push for Global Rule on Bank Capital

NYTimes.com
May 25, 2010

Capital is the body fat of banking: too much is debilitating, too little is fatal. During the financial crisis, as large banks burned through their capital reserves, governments were forced to add padding at public expense.

Now one of the most consequential decisions about new restraints on the banking industry — how much more capital banks should hold in their rainy day reserves — is being decided not on Capitol Hill but far from Washington, by a committee based in Basel, Switzerland, The New York Times’s Binyamin Appelbaum reports.
The Obama administration is pursuing an international agreement to make banks hold significantly larger reserves, which it regards as essential to increase the stability of the global financial system. It wants to complete the negotiations, which are being coordinated by the Basel Committee on Banking Supervision, by the end of the year.

The world’s largest banks have responded with consternation, arguing that the proposed standards would tie up too much money that otherwise could be used for lending, a loss that would curtail economic growth.

The Rest…HERE

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