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German financial watchdog says Basel IV draft bank rules unacceptable for Germany 

November 2, 2016

Reporting by Alexander Hübner; Writing by Arno Schuetze; editing by Larry King, Reuters

A new draft of proposed international bank regulation is unacceptable for Germany because the rules might restrict lending by the country's banks, the head of Germany's financial regulatory agency said.

The Basel Committee of bank supervisors from nearly 30 countries intends to deliver the new Basel IV rules by the end of this year. The rules aim to avoid repeats of the financial crisis of 2008-09, when taxpayers had to bail out under-capitalised lenders.

The plan, however, has drawn criticism in Europe. The European Union's financial services commissioner said several weeks ago that the reform risks hurting European banks and needs to be changed.

Felix Hufeld, the president of Germany's regulatory agency, Bafin, weighed in late on Tuesday. "Discussions are not over the finish line yet," Hufeld said. "From a German perspective, what we have on the table so far is not acceptable."

Germany and France, especially, are worried that the proposals presented so far could discourage their banks from lending to consumers and companies. They say that the new rules demand a significant increase in the capital banks must hold against their risks. Read more

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