The World’s Economies Try To Prevent Another Crisis

June 28th, 2010

Banks might have to operate under tighter rules in order to avoid another global financial slump.

  • Some of the world’s largest economies are designing major regulations for banks that would ensure they are prepared to absorb large financial losses and avoid another financial meltdown.
  • The negotiations, called Basel III, require banks to have secure and defined assets that they can hold against short- and long-term financial losses. But after a meeting on Sunday it seems that it could be years before these regulations are put into place.
  • Banks are reluctant to adopt these regulations. They argue that they could slow the global recovery from the recent economic crises.

Facts & Figures

  • If Basel III is put into place, the economic growth of the United States and Japan could fall 3% by 2015

Best Quote

“The quality and amount of capital in the banking system must be significantly higher to improve loss absorbency and resiliency.”  - Mr. Draghi, Governor, Bank of Italy.

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