Basel III could save G20 states 10 trillion euros: Carney

14th September 2010, Comments 0 comments

New bank capital rules could save G20 countries at least 10 trillion euros (12.9 trillion US dollars), Bank of Canada governor Mark Carney estimated Tuesday.

A calculation of benefits from so-called Basel III banking regulations and long-run costs gives "average net benefits for G20 economies of 30 percent of GDP (gross domestic product) in present-value terms, or about 10 trillion euros," Carney said in an address given in Berlin.

"This estimate is conservative. The analysis understates the benefits of the new rules and errs on the side of overstating the costs," he added.

On Sunday, the Basel Committee on Banking Supervision unveiled tougher capital requirements for banks intended to protect against financial crises that will be presented for approval to the Group of 20 (G20) developed and developing nations in November.

The changes, which require banks to build stronger buffers of high-quality assets to protect against future losses, would require "hundreds of billions" of euros (dollars), committee chairman Nout Wellink said Monday.

"I hesitate to mention precise figures because the implementation is due to happen over a period of about eight years and the figures may change, but it involves hundreds of billions," Wellink, also the Dutch central bank governor, told Radio 1 in the Netherlands.

© 2010 AFP

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