Bank capital cushions more important than role split - BIS
February 4, 2013 10:14 PM EST
Separating banks' riskier trading activity from their retail business would make the banking system more complex and is less important that building bigger capital buffers to prevent future crises, a top central banking official was quoted saying.
"From my point of view, higher capital and liquidity requirements are more important for stabilising banks than the separation of proprietary trading and deposit-taking business," Jaime Caruana, general manager of the Bank for International Settlements (BIS), was quoted saying in Handelsblatt newspaper.
However, it was up to finance ministers if they want to make changes to the universal banking model, whereby retail and investment banking are under the same roof, he told the paper.
France and Germany are planning a reform of the banking system that will leave big lenders largely intact, despite a welter of rules aimed at making sure taxpayers are not forced to bail them out in the next crisis.
Meanwhile British Chancellor George Osborne is set to say later on Monday that banks which fail to guard their day-to-day banking from risky investment activities will face being dismantled.
The BIS has led efforts by international banking supervisors to force banks to bolster their loss-absorbing capital to help prevent the spread of financial crises.
Caruana said in the interview published on Monday it was too early to give the all-clear on the euro zone crisis, despite a period of relative calm in the markets following intervention by the European Central Bank.
"It is still possible that the euro crisis can break out again and worsen," he said, adding that politicians must make use of the calm brought by the ECB to push through reforms on a European and national level.
(Reporting by Jonathan Gould; Editing by David Holmes)
Most Popular Slideshows
- Kate Middleton Suffocated in Kensington Palace, Queen Elizabeth Reported War With The Duchess [PHOTOS]
- Chris Martin Dating Reports: Jennifer Lawrence Vs Gwyneth Paltrow [PHOTOS]
- British Style Icon Kate Middleton Fashion Talk With Camilla Parker-Bowles Daughter-In-Law [PHOTOS]
- Miranda Kerr Broke Her Silence: Not Pregnant With James Packard’s Baby [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- 4.7-Inch, 5.5-Inch iPhone 6 Models Confirmed with Similar Build, Cam Features & 300+ Screen Pixels on Release Date
- Saudi Arabia: Brothers Beheaded For Smuggling Marijuana Into The Kingdom
- ISIS: More Journalists Beheading To Come After James Foley and Steven Sotloff [Video]
- Moto X+1 is Likely Nexus 6 Template; Motorola Shamu is 1st Android Silver with Snapdragon 810 – Reports
- James Foley’s Executioner Has British Accent—A Chilling Reminder That ISIS Has Foreign Members
- James Foley: More Chilling Information Revealed By Escaped Journalists
- Xiaomi Mi4 vs iPhone 6: Why Forecasts Favor Mi4 as The Next Best Phone Against iPhone 6