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Bundesbank Sees Need to Re-Calibrate Basel Reform Proposals 

August 29, 2016

Arabile Gumede & Boris Groendahl, Bloomberg

Global regulators’ plans for changes of banking rules will need tweaking to have the desired effect on lenders’ balance sheets, according to the Bundesbank’s top official for bank regulation, Andreas Dombret.

Work on the Basel Committee on Banking Supervision’s plans for completing the post-crisis reform package known as Basel III will be a priority for the Bundesbank in the second half of the year, Dombret told journalists Monday in the South African capital, Pretoria. The central bank will work with the German banking industry to assess the effect of the proposals, especially on mortgages, he said.

“We need to catch the outliers in the risk-weighted assets variability reliably, without having a significant increase in the capital requirements for the entire industry,” Dombret said. “We have been looking at the quantitative impact studies and feedback we were getting from the industry and there is a need to re-calibrate.”

The Basel Committee, the top rule-setter for global banks whose members include the Bundesbank, the U.S. Federal Reserve and the Bank of Japan, plans to finalize a list of new and changed rules by the end of the year. Bank industry lobbyists have convinced some policy makers with their warning that the plans could stifle growth. Read more

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