Tricky lessons yet to be learnt by international regulators

The view from Wall Street

International regulators are yet to address fully the trickiest lessons of the credit crisis and the financial panic surrounding the collapse of Lehman Brothers two years ago this week, US bankers said, even as they gave a warm welcome to the new capital rules imposed under Basel III.

The higher capital requirements make it less likely that a major firm will reach the financial precipice as a result of an economic downturn, but the Bank for International Settlements and national regulators are still wrestling with how to stop the collapse of one institution from spreading through the financial system, as Lehman's did.

Talks on whether to force "systemically important" financial institutions to hold even more additional capital have not yet been concluded, and a banking sector backlash against new liquidity rules means further uncertainty.

The seizure of the credit markets meant even well-capitalised banks could not finance themselves during the panic in 2008, and Basel III imposes a requirement that banks hold 30-days' worth of funding in easy-to-sell assets such as government bonds. But traders have warned the rules could have unpredictable consequences for the capital markets, including the commercial paper market used by banks and firms for short-term funding. The BIS said there would be a four-year "observation period" during which it could alter the rules.

Bank of America and Wells Fargo, two of the largest banks in the US, were among those that said yesterday their institutions already met the capital standards of Basel III. Dick Bove, at Rochdale Securities, said 61 of 62 US banks with assets over $10bn (£6.48bn) already met the Basel III standards, giving them an international advantage.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral