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Basel eases new rule to curb banks' exposures to customers
April 15, 2014 / 10:10 AM / 4 years ago

Basel eases new rule to curb banks' exposures to customers

LONDON, April 15 (Reuters) - Global regulators have eased a rule aimed at curbing how much business a lender can undertake with an individual customer in a bid to minimise fallout if the customer goes belly up.

The Basel Committee of global banking regulators said on Tuesday it had tweaked several aspects of its proposal to update the measurement and control of so-called large exposures at banks.

From 2019 banks will have to report any exposure that is equivalent to 10 percent of the their capital base, up from the 5 percent initially proposed.

The overall limit of 25 percent remains unchanged but will be based on a bank’s Tier 1 capital holdings. Lenders feared it would be based on a narrower core Tier 1 base.

A bank’s exposure to one of the world’s top 29 lenders that are deemed to be globally systemically important will be limited to 15 percent, at the top end of the 10-15 percent Basel had originally proposed.

Reporting by Huw Jones, editing by Joshua Franklin

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