New bank rules require 'hundreds of billions': top official
New bank capital rules agreed by top central bankers and regulators would require "hundreds of billions" of euros (dollars), the chairman of the Basel Committee on Banking Supervision 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," Nout Wellink, also the Dutch central bank governor, told Radio 1 in the Netherlands.
"It is a lot of money."
Describing the agreement as "very important," Wellink said it should make another global economic crisis "much less likely."
The new rules, adopted by Bank of International Settlements regulators Sunday and called Basel III, would compel banks to more than triple their current core capital reserves in a bid to avert another crisis like the one that nearly broke the financial system two years ago.
Wellink told the broadcaster that banks would find the money partly from paying lower dividends and bonuses, and partly "on the capital market."
The new rules would be phased in over several years so that banks will not need to cut back on investments and credit, he said.
"We made it so that, in our opinion, the economy would not suffer because it will happen over a long period. We kept the weak economy in mind," he added.
© 2010 AFP