Global financial regulators, after reaching a consensus last year on tougher capital rules to govern banks that would roil the world economy if they collapsed, will try to hammer out a deal next week on controls for lenders with the potential to bring down national economies, Bloomberg News reported yesterday. The Basel Committee on Banking Supervision plans to publish draft rules for systemic lenders that are not covered by last year's plans requiring global banks deemed too-big-to-fail to hold additional capital of as much as 2.5 percent of their risk-weighted assets. To reach a deal, nations in the group will need to bridge differences over whether the planned rules for domestically systemic banks should also apply to subsidiaries of the global lenders targeted last year. The split centers on whether local regulators should be free to impose stricter capital rules on these units than those the parent bank must follow.
