Bank regulators seek deal on crisis reforms

SANTIAGO: World banking supervisors said they were closing in on finalising controversial new regulations to prevent a repeat of the 2008 financial crisis.

The Basel Committee, a forum of international financial authorities, held a meeting in Chile with regulators to set new global norms for banking stability.

“The committee has spent the past two days working towards an agreement to finalise these post-crisis reforms,” chairman Stefan Ingves told the gathering in Santiago.

“Wehave madeverygoodprogress and the contours of an agreement are now clear.”

The committee plans to oblige banks to strengthen their capital base to cushion them against financial shocks.

Ingves said he hoped the members of the forum would approve the new regulations, known as the ‘Basel III’ reforms, in January.

“There will no doubt be increases and decreases in operational risk capital requirements for certain banks,” Ingves said.

The reforms also aim to impose special obligations to regulate the debt ratio or ‘leverage’ of “global systemically important banks,” he said.

Disagreements have threatened to complicate the reforms.

The United States has been pushing for strict capital requirements.

European governments, regulators and finance groups fear stringent capital requirements will hobble their banks and economies.

Meanwhile US President-elect Donald Trump has vowed to eliminate the landmark Dodd-Frank financial reform law adopted in the post-crisis era.

German central bank board member Andreas Dombret said this month he hoped Trump would not derail the Basel reforms. — AFP