IBA speakers critcise Basel III capital requirements

Author: | Published: 2 Nov 2011

Basel III plans to raise banks’ capital requirements were slammed at a Tuesday November 1 IBA session as both short-sighted and ineffectual.

Speaking at the session, 'The People v the financial industry’, Hengeler Mueller’s banking and capital markets’ partner, Hendrik Haag said stifling the industry with overregulation in the hope of avoiding another crisis would not work.

"It is short-sighted of politicians to think they can impose additional deposit requirements on the financial sector and still expect the industry to continue to play a role in financing the market," he said. "For the economy to grow fast you need there to be enough cheap money coming in."

Wardynski & Partners’ Krzysztof Wojdylo said the proposed Tier One capital requirements under Basel III would not solve the majority of problems in most banks as it required too little capital to be retained. The average solvency ratios of Polish banks during the 2008 financial crisis were 2...