U.S. pledges banks on track for Basel: FSB

WASHINGTON Fri Nov 30, 2012 6:18pm EST

WASHINGTON (Reuters) - The largest U.S. banks must show they are on track to meet tight new capital rules despite the fact the United States has delayed the rules, a G20 group monitoring an overhaul of the global financial system said.

The banks must show "an ability to maintain no less than steady progress toward full compliance with the Basel III requirements," the Financial Stability Board (FSB) said in an emailed statement on Friday.

U.S. regulators this month delayed the introduction of the Basel III rules - which aim to bolster banks' defenses against devastating crises such as the one in 2008 - beyond January, and Europe is expected to follow suit.

The delays have triggered fears among financial leaders the capital accord could be derailed completely.

"In the U.S., the relevant agencies take very seriously their commitments ... regarding the implementation of Basel III and are working to conclude the rule making process as expeditiously as possible," the FSB said.

The 19 largest U.S. banks subject to the Fed's stress testing program represented over 90 percent of the assets of internationally active U.S. banks, and three-quarters of the assets of all U.S. banks, the FSB said.

The statement follows a meeting of the FSB's Steering Committee in New York on Thursday.

The Basel III accord hatched by regulators in the aftermath of the crisis demands that banks set aside more capital to cover losses such as unpaid loans, and lays out higher standards in what assets a bank can use to meet these capital levels.

The rules, which triple the amount of basic capital banks need to hold, are meant to be phased in over a six-year period starting in January 2013. The European Union is struggling to agree on many aspects of the package.

However, Europe was due to finalize the legislation of the rules "very shortly", the FSB said in its statement, which was first reported by the Financial Times.

(Reporting by Douwe Miedema; editing by Andrew Hay)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

Where do you want to go?

We look at when to take trips, budget considerations and the popularity of multigenerational family travel.   Video 

Recommended Newsletters

Reuters U.S. Top News
A quick-fix on the day's news published with Reuters videos and award-winning news photography and delivered at your choice of one of four times during the day.
Reuters Deals Today
The latest Reuters articles on M&A, IPOs, private equity, hedge funds and regulatory updates delivered to your inbox each day.
Reuters Technology Report
Your daily briefing on the latest tech developments from around the world from Reuters expert tech correspondents.