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UPDATE 1-Global bank watchdog to review rule on zero-risk weighting for sovereign debt 

January 26, 2015

Huw Jones, Reuters

Global banking supervisors are reviewing a rule that allows banks to hold little or no capital against risky sovereign debt held on their books.

The so-called zero-risk weighting rule was heavily criticised during the euro zone debt crisis when several countries in the single currency area had to be bailed out.

Even though the ratings on these countries' debt sank to junk status in some cases, banks were allowed to hold little or no capital.

Read More: Reuters

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