Basel consultation fears revealed

Author: | Published: 16 Apr 2010

The consultation period for the Basel Committee’s liquidity and banking risk proposals closes today. But banking lawyers say the Committee should not begin implementation immediately, and instead carry out quantitative impact studies to avoid crippling lending.

“If changes are implemented as proposed and on a short timetable, bank capital ratios will drop precipitously for many large financial institutions,” said Mark Nicolaides, a regulatory partner at Latham & Watkins in London.

“Regulators would be well-advised to put off the day of reckoning for one to three years to give banks time to deleverage and raise more capital.”

The potential problems are caused...