BOE Tucker: Progress Made On New Bank Capital Rules
03.09.10, 10:13 Uhr
SEOUL -(Dow Jones)- Bank of England Deputy Governor Paul Tucker said Friday that the Financial Stability Board and the Basel Committee for Banking Supervision are making "substantive progress" on devising new capital and liquidity requirements for banks, "notwithstanding what has been in the press."
The two bodies are aiming to prepare a final list of conditions for banks to comply with by the time of a meeting of Group of 20 heads of government in November, a goal that some observers have said may not be realistic.
Speaking at a conference on global financial reform, Tucker said that "many in the banking industry are resisting" new liquidity requirements, "but it will happen and it will lay down some minimum standards."
Tucker, who is also chairman of the FSB's Cross-Border Crisis Management Working Group, said that revising banks' capital requirements has been "much more problematic," though "substantive progress is being made on this front."
"Yes there has been some dilution of the proposals from a few months ago, but the dilution so far isn't too great," he said of the new capital requirements.
Tucker said there is unlikely to be an agreement by the end of year as to how much over-the-counter derivatives trading should be moved to central exchanges, but overall the centralization of derivatives trading "will have enormous benefits in terms of laying down standards, collateralization, and ensuring transparency in terms of what is going on in these markets."
Another important step will be to "reduce the extent to which reliance on credit rating agencies is inscribed and embedded in the regulatory framework," Tucker said, without giving a timeline for when such reforms may be achieved.
Speaking at a conference on global financial reform, Tucker said that "many in the banking industry are resisting" new liquidity requirements, "but it will happen and it will lay down some minimum standards."
Tucker, who is also chairman of the FSB's Cross-Border Crisis Management Working Group, said that revising banks' capital requirements has been "much more problematic," though "substantive progress is being made on this front."
"Yes there has been some dilution of the proposals from a few months ago, but the dilution so far isn't too great," he said of the new capital requirements.
Tucker said there is unlikely to be an agreement by the end of year as to how much over-the-counter derivatives trading should be moved to central exchanges, but overall the centralization of derivatives trading "will have enormous benefits in terms of laying down standards, collateralization, and ensuring transparency in terms of what is going on in these markets."
Another important step will be to "reduce the extent to which reliance on credit rating agencies is inscribed and embedded in the regulatory framework," Tucker said, without giving a timeline for when such reforms may be achieved.
DJG/dok
