PLEDGE TO FI­NALISE BASEL III RE­FORMS

But G-20 fi­nance chiefs stop short of mak­ing progress on cer­tain pro­pos­als that have led to Europe-US stand­off

New Straits Times - - Business -

have been wait­ing months for Pres­i­dent Don­ald Trump to in­stall new faces at the four in­sti­tu­tions that rep­re­sent the US on the Basel Com­mit­tee, led by the Fed­eral Reserve.

Ger­many wants to ink a deal on new mea­sures to stop banks gam­ing cap­i­tal rules dur­ing its pres­i­dency of the G-20, whose fo­cal point is a sum­mit in July.

But no break­through is pos­si­ble un­til the US ne­go­ti­at­ing team is formed.

Ger­many in­creased the odds of a deal this week, when reg­u­la­tors said they were ready to ac­cept an out­put floor — a blunt check on banks’ use of their own sta­tis­ti­cal mod­els to mea­sure as­set risk that could drive up their cap­i­tal re­quire­ments.

That was an im­por­tant shift in Ger­many’s stance. Back in Novem­ber, Bun­des­bank ex­ec­u­tive board mem­ber An­dreas Dom­bret said Ger­many would walk away from the talks un­less its key de­mands were met.

His list in­cluded pre­vent­ing the in­tro­duc­tion of the out­put floor in the fi­nal Basel pack­age.

Go­ing into the talks here, Fi­nan­cial Sta­bil­ity Board chair­man Mark Car­ney warned of balka­ni­sa­tion in global fi­nan­cial mar­kets that could en­sue if G-20 na­tions gave in to “re­form fa­tigue”.

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