FN: Basel panel likely to reaffirm extra capital ratio proposal for big banks

27 September 2011

The Basel Committee on Banking Supervision is said to be set to rebuff heavy lobbying by banks and stick with a proposal requiring 28 big global banks to hold between 1 and 2.5 per cent of extra capital as a percentage of their "risk-weighted assets".

The list of systemically important financial institutions that would be subject to the proposal isn't public, but it is widely expected that JP Morgan Chase, Bank of America, Barclays, Deutsche Bank, UBS and HSBC are among those on it. The surcharge would kick in gradually between 2016 and 2019.

US watchdogs are in favour of changes that would make the formula for deciding which banks qualify for the additional capital ratio more transparent and simpler, so that bankers can see what the surcharge would be ahead of time.

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