EU ministers close to deal on higher capital cushions for banks to avoid repeat of 2008 crisis
Posted May 2, 2012 8:20 pm.
This article is more than 5 years old.
BRUSSELS – Denmark’s finance minister says she and her European Union counterparts are close to a deal to force banks to build up bigger capital cushions against financial shocks.
Early Thursday, after more than 15 hours of debate, Margrethe Vestager said only a few “technical issues” needed to be ironed out before the ministers’ next meeting in two weeks.
The EU is in the process of writing an international agreement on capital defences for banks into European law that regulators hope will prevent a repeat of the 2008 financial crisis.
The so-called Basel III deal would force lenders to increase their highest-quality capital gradually from 2 per cent of the risky assets they hold to 7 per cent by 2019. An additional 2.5 per cent would have to be built up during good times.
