Global banking checks to begin early 2012

EUBusiness.com (AFP) ^ | 08 January 2012, 21:48 CET

[Olog-hai]

Checks of banks in the European Union, Japan and the United States are to beginning early in 2012 to see if they have put the globally agreed Basel rules into practice, central bank governors said Sunday.

The Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision (BCBS), announced the checks in a statement issued after a meeting.

The group agreed that the results of the tests would be made public, the statement added. …

The "Basel II" capital rules for the world's biggest banks are designed to prevent a repeat of the 2008-2009 financial crisis when governments were forced to bail out banks, by requiring them to boost their capital. …

The Basel III rules require all banks to strengthen their capital reserves by raising total core reserves to 7.0 percent from 2.0 percent at the moment.

In addition, regulators decided in 2011 to impose additional rules on the world's biggest banks, asking them to hold 1.0 percent to 2.5 percent more in core reserves, on top of the 7.0 percent required for all banks.

Some bankers have raised fears that the new capital rules will hit profits since they will force the lenders to hold more money in reserve rather than put it to work. …

[knarf]

I can't think of anything more frightening than this opening statement;

"Checks of banks in the European Union, Japan and the United States are to beginning early in 2012 to see if they have put the globally agreed Basel rules into practice, central bank governors said Sunday.

Globally agreed ?

When did THIS happen ?

[Olog-hai]

Basel III seems to have been “agreed” to between 2010 and 2011. The Basel Committee itself goes back to 1975; they claim to be independent from the Bank of International Settlements, but also part of it at the same time. It’s all tied to the IMF.