Regulators near Basel III deal

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The Independent Online

Global regulators, seeking to avoid an effective German veto of proposed new rules for banks' balance sheets, are expected to reach a deal next week in a dispute over the definition of capital reserves.

The committee drafting the new "Basel III" rules will meet in Switzerland on Tuesday, paving the way for a final endorsement of the reforms by G20 leaders in November.

In July, Germany was the only member of the Basel Committee of banking supervisors and central bankers that refused to endorse a draft of the rules on new minimum levels of capital which banks will have to hold.

Up to a third of the capital of Germany's banks – or $50bn – comes from so-called "silent participations", a form of hybrid capital, often from state funds, that the Basel Committee wants to exclude from the new core capital requirements. Reuters