Bank capital reform 'eliminates uncertainty': Trichet
An agreement on new global bank capital requirement rules removes uncertainty and helps to consolidate the economic recovery, the head of the European Central Bank said Monday.
"In the present (state) of the global recovery, uncertainty is the enemy," said Jean-Claude Trichet, speaking on behalf of central bankers meeting at the Bank for International Settlements.
"With this decision, we eliminated uncertainty in large areas, which is a major contribution in consolidating the global economy."
BIS regulators on Sunday agreed new rules that would require banks to raise the minimum capital reserves that they hold against losses.
Banks have been campaigning in recent weeks against what they describe as over-regulation, warning that it could kill off nascent growth in the economy.
But Trichet noted that the new rules would make a "substantial" contribution to growth since they strengthen the banking sector, making it significantly more resilient.
Asked if he had an estimate on the sum that banks would have to raise to meet the new rules, Trichet said he had no precise numbers.
"It depends very much on the assumptions, and numbers of factors, and the earnings of banks," he said.
Ahead of the deal, bankers in France and Germany had estimated that the new rules may require them to raise some 255 billion euros.
© 2010 AFP