Money Talks

Bankers on Board for New Global Rules

Aiming to strengthen the world’s financial institutions and stave off a future international banking crisis, top regulators from 27 nations—including U.S. Fed chief Ben Bernanke—gathered in Switzerland on Sunday to approve a new set of regulations. The group’s main recommendation, known as the Basel III rules, was to force banks to boost the amount of common stockholders’ investment they hold from 2 percent to 7 percent of assets. In boom times, the panel suggested that banks raise this figure even higher, though they left that additional rule up to individual nations to decide. The requirement is meant to make financial institutions more stable and better prepared to weather future crises. Though Bernanke and Treasury Secretary Timothy Geithner support the new regulations, the American Bankers Association has said it will follow the rules only reluctantly, taking issue with the group’s decision “as a matter of timing” and fearing short-term “dislocations in the credit markets.”