G20 compromises on plans for tougher banking rules
Monday 28 June 2010
Different countries will be able to phase in the tough new international banking regulations at different times according to their economies' needs, under plans expected to be agreed at the G20 summit in Toronto.
The compromise on timing mirrors a similarly flexible approach on the increasingly divisive question of whether countries should continue fiscal stimulus measures to boost economic recovery, or make moves to cut ballooning public deficits.
There was little dissent on the question of whether banks should face tighter regulation to avoid a repeat of the global financial meltdown of two years ago. But the G20's original aim of agreeing the new rules by November and having measures in force by the end of 2012 is being softened because different countries are at different stages of recovery from recession.
The summit also refused to back proposals for a universal levy on banks to pay for the string of huge taxpayer bailouts, despite renewed pressure from European leaders keen to placate voters facing austerity measures.
Details of the final agreement remained unclear last night, with negotiations involving the G20 leaders continuing late into the evening. But a draft of their communiqué listed five guiding principles for financial reform including the need to take into account the individual circumstances of each nation and the need to "level the playing field". "The G20 expresses support for the financial sector to make a fair and substantial contribution toward paying for any burdens associated with government interventions where they occur to repair the financial system for fund resolution," the draft said, while refusing to say how such contributions would be made.
A key plank of the reforms is revised "Basel III" measures from the committee of central bankers, including raising banks' capital and liquidity requirements. On Friday, the Bank of England called for an "extended transition" to any new international rules. And George Osborne used yesterday's talks at the G20 to push for a longer deadline. The position of the Chancellor of the Exchequer, which followed a lower-than-expected levy on British banks in last week's emergency Budget, is seen as evidence that Mr Osborne is listening to representations from lenders. Although smaller than feared, the levy coming into force in January will raise £8bn in the first four years.
Britain's move, alongside similar measures in Germany and France, was decided before the Toronto summit after opposition saw a global levy dropped from the G20's proposals.
Similar plans were dropped from the financial reform Bill passed by the US Congress last week. But within days President Obama was urging lawmakers to agree a $90bn, 10-year bank levy as the next stage of the reforms.
Malaysia Airlines plane crash exposes alarming flaw in airline security: over one billion flights made last year without stolen-passport check
Teacher shows sex tape featuring herself to pupils during class by mistake
David Cameron resorts to paying for Facebook fans because not enough people like him
Malaysia Airlines Flight MH370: Oil slicks in South China Sea ‘not from missing jet’, officials say
Swarm of killer bees sting woman 1,000 times
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
- 1 International Women's Day 2014: The shocking statistics that show why it is still so important
- 2 Australian man Rod Sommerville reacts to bite from deadly snake by reaching for cold beer
- 3 Singapore sting: Sky-high prices are pushing locals to the edge of affordability
- 4 Teacher shows sex tape featuring herself to pupils during class by mistake
- 5 David Cameron resorts to paying for Facebook fans because not enough people like him
iJobs Money & Business
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£55000 - £70000 per annum + benefits: Pro-Recruitment Group: In-House Corporat...
£80000 - £100000 per annum + benefits: Pro-Recruitment Group: In-House Opportu...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...