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Banks turn up heat ahead of Basel Committee meetings 

September 2, 2016

Jim Brunsden, The Financial Times

Banks have intensified their battle against a planned toughening of global capital rules, urging regulators to scale back reforms that they warn would force them to curtail lending.

In a joint letter to the Basel Committee on Banking Supervision, associations representing banks in Europe, Japan and Canada say that the proposals as they stand would “significantly increase capital requirements”, in turn limiting banks’ ability to lend.

The move is an attempt to influence the debate ahead of two key meetings this month of the Basel group, whose plans have also caused jitters among European central banks and regulators.

The letter, dated August 31 and signed by the European Banking Federation, the Japanese Bankers Association and the Canadian Bankers Association, is part of a push by the industry to limit what they see as a backdoor attempt by regulators to increase capital requirements by rewriting parts of the rule book for how banks should calculate risk.

The industry has dubbed the plans “Basel IV” as a way to emphasise their view that they go beyond the internationally-agreed Basel III rules that were developed in response to the 2008 financial crisis. Read more

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