FRANKFURT (MNI) – New rules to strengthen banks’ capital positions
agreed over the weekend are a good and justifiable compromise,
Bundesbank Vice President Franz-Christoph Zeitler said Monday.
The rules will have less impact on German banks that lend primarily
to medium-sized businesses than on internationally active banks, which
have the greatest need for more capital, Zeitler told a press conference
here.
“For German banks, Sunday’s agreement means a need for more capital
stretched over the next eight years of a considerable measure that can
be covered via retained earnings and taking on capital,” Zeitler
explained in prepared introductory remarks.
“The need for more capital falls to a large extent on large,
internationally active banks” that were most affected by the finance
crisis, he continued.
By contrast, “institutes focused on lending to small and
medium-sized enterprises and private households are burdened by the new
rules to a much lesser extent.”
Germany was thought to be one of the stumbling blocks to an
agreement on Basel III, given the amount of capital domestic banks would
have to raise.
Zeitler acknowledged that Germany had to make concessions to reach
an accord. The deal “is certainly a compromise, but it is a good and
justifiable compromise,” he said.
Asked whether there was a need to reform Germany’s community
savings banks (Sparkassen), Zeitler said “the question of the legal form
of an institute is something for the owners” to decide.
[TOPICS: M$X$$$,M$G$$$,M$$CR$,MGX$$$]
