International bankers warn that forcing several financial establishments to reach up with the new capital requirements too fast could
greatly hurt the economies around the world.
As a result of the Basel III agreement that 27 countries have settled last month, individual countries might push their banks to meet with the new capital and liquidity standards before the deadline on year 2019.
According to the chief executive of Deutsche Bank, Josef Ackerman, there really is a great concern when national governments accelerate the phasing in process on the finance industry.
Ackerman, the chairman of the Institute of International Finance, which is holding its yearly meeting in Washington this weekend, warns along with other bankers that global economy is still fragile. Forcing the capital standards too quickly could already throttle the economy even before it has recovered.
The Basal III agreement states that banks should get top-quality capital equivalent to a total of 7-percent of their risk-bearing assets. That is three times more than the current standards so they can better endure financial shocks and downturns on the economy.
They have until 2015 to meet the minimum core Tier capital requirement; that is, at least 4.5 percent of assets. By 2019, they should have additional 2.5 percent, which is called the capital conservation buffer.
Even the regulators who attended the event treated the idea that the timetable would be moved up as less important, thinking that the new requirements will not impact the economies around the world negatively.