Global banking regulators have agreed to effectively delay the enforcement of new capital adequacy rules for large banks, opting to create a transition period of at least 10 years, The Nikkei reported in its Wednesday edition.
The Basel Committee on Banking Supervision, made up of the banking authorities of major countries, has been discussing introducing stricter capital requirements since September 2008 to prevent a recurrence of the global financial crisis.
The proposed changes include raising the 8% minimum capital ratio banks are currently required to maintain and focusing on a narrower definition of core capital.
The committee will stick to its plan to gradually introduce the new rules starting in 2012, but will establish a transition period of 10 to 20 years. This means that the rules will not be fully implemented until at least the early 2020s.
Banking authorities have apparently determined that a rush to adopt stricter requirements might deter lending by major banks and hurt the chances of a recovery in the global economy.
