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Banks Push Back Against Basel’s ‘Surreal’ Plans 

August 9, 2016

John Glover & Nicholas Comfort, Bloomberg

European bankers are ramming home their message that global regulators are trying to impose outlandish new rules that aren’t backed by the mandate they got from policy makers.

Finance chiefs exploited pledges by G20 and European Union finance ministers to avoid boosting capital requirements as they campaigned against the plans during earnings calls in past weeks. Rules drafted by the Basel Committee on Banking Supervision would penalize lenders and hinder their ability to finance economic growth unless they are cut back significantly, executives said.

“Right now it looks like the impact is humongously draconian and would essentially be a complete game changer for the banking industry on this planet,” said Marcus Schenck, Deutsche Bank AG’s chief financial officer, speaking on the company’s analyst call last week.

“There is a lot of work still going on to see how this can be put in sync with what I think was last stated on the G20 meeting, where they again reiterated that this Basel 3 refinement is not meant to cause any significant additional capital need on the side of the banking industry,” Schenck said. Read more

 
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