FRANKFURT, Sept 6 Global banks will be required
to hold Tier 1 capital of nine percent including a 3 percent
so-called "conservation buffer", German weekly Die Zeit
reported, quoting a draft proposal from the Basel Committee, the
body tasked with drawing up global banking rules.
Die Zeit's online edition also said regulators can demand
banks accumulate a so-called "anti-cyclical buffer" of 3 percent
so that Tier 1 capital requirements can rise to 12 percent in
Previously regulators required a Tier 1 ratio of no less
than 4 percent.
The Basel committee was set to discuss the proposal on
Tuesday and aims to finalise Basel III by agreeing how much
extra capital banks will have to hold and the length of time
they have to weed out lower quality capital from core capital.
Germany's Bafin could not be reached for comment, while the
Bundesbank declined to comment on the report. The two bodies
represent Germany in the Basel Committee.
Banks will be required hold common equity -- which consists
of pure equity plus retained earnings -- of five percent "after
deductions", Die Zeit said, adding the requirement will come
into force in 2013.
As part of Core Tier 1 capital requirements, which are more
stringent that Tier 1 requirements, the conservation buffer and
anticyclical buffer will be 2.5 percent each, the paper said.
The introduction of a conservation buffer will be staggered
between 2014 and 2018, the paper said.
Furthermore, capital requirements can rise to 16 percent, if
Tier 2 requirements are included, the paper said. This figure
includes a 6 percent Tier 1 capital buffer, 4 percent of Tier 2
capital, the 3 percent conservation buffer, and the 3 percent
Banking regulators and central bank officials from across
the world meet on Tuesday to finalise their Basel III package of
tougher bank capital and liquidity rules.
It seeks to apply lessons from the financial crisis so that
states are less likely to have to rescue banks again in the next
crisis. Regulators and bankers disagree over how much the new
rules will impact the economy.
(Reporting by Edward Taylor and Alexander Huebner; Editing by