VIENNA (MNI) – The new Basel III accord requiring a 7% core tier 1
capital ratio will impact bank lending in the Eurozone, Polish Central
Bank Governor Marek Belka said Friday.
Belka noted that the agreement had been accepted on both sides of
the Atlantic. However, “European banks have basically not more than 1%
of tier 1 capital and they have to get to 7%. Will it have some impact
on their business models, on their policies? Of course,” he asserted.
Belka said that his comments reflect some of the discussions held
at the European Central Bank’s General Council in Frankfurt earlier this
week.
ECB Governing Council members, however, have thus far assured that
given a protracted phasing-in period, tougher capital requirements will
not harm the real economy’s access to credit or undermine the recovery.
Under the new accord, banks would be required to adhere to a 4.5%
minimum core tier 1 ratio by 2015, rising in increments to 7% by 2019.
The new requirements are less of a problem in Central and Eastern
Europe since banks in the regions already enjoy a much higher tier 1
capital ratio. Still, the demands on western European parent banks might
have an impact on local banks as well, Belka said.
Nevertheless, Belka said he is “much more worried about a possible
credit boom in Poland than about a credit crunch — something that is
alreday fact.”
[TOPICS: M$$EC$,M$X$$$,MT$$$$,MGX$$$]
