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Central Bank chief warns Basel III capital rules could curb SME growth 

March 12, 2014
Hadeel al Sayegh and Mahmoud Kassem, The National

“Job creation in emerging economies really depends on finding a way outside Basel III restrictions on SME financing that will not contribute to job creation and will probably contribute to creating problems in many emerging and developing economies,” said Sultan Bin Nasser Al Suwaidi at the Global Financial Markets Forum in Abu Dhabi.

The Basel bank industry regulations, unpopular with many bankers who see them as stifling growth, aim to prevent the kind of financial crash the world witnessed in 2008. The regulations, which will come into place in 2018, are aimed at ensuring financial institutions have enough cash at hand to deal with any losses by reining in how much they can borrow and lend.

“If we create a world where banks don’t take risks, which is where we are heading, we’re not going to have an economy,” said Bob Diamond, the founder and chief executive of Atlas Merchant Capital and the former chief executive of Barclays. “I worry terribly. The fact that the regulators are in essence trying to replace the boards is a very slippery slope.”
 
Read more: The National
 
 
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