FRANKFURT, Nov 30 (Reuters) - New global banking rules meant to avert another financial crisis must be fair for all regions, the head of Germany’s central bank said on Wednesday after regulators failed to reach a deal on the new standards at a key meeting.
The Basel Committee of regulators aims to define how much capital banks across the world must hold to cover risks. But its proposals have been challenged by Europe and Japan, who say they risk disturbing the flow of credit to the economy.
“A successful negotiation outcome must strengthen the resilience of the banking sector but also be regionally balanced and cannot hollow out the risk-oriented approach of the Basel framework,” Bundesbank President Jens Weidmann said.
Basel has set itself an end-of-year deadline, which means the pressure is now on to iron out differences in time for Basel’s oversight body of central bank governors and heads of supervision (GHOS) to endorse a package in January.
“We will therefore continue to work with impetus until the beginning of January ... because regulatory uncertainty also damages the functioning of the banking sector,” Weidmann said. (Reporting By Francesco Canepa; editing by Mark Heinrich)