This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/business/blog/2013/jan/07/banks-liquidity-rules-relaxed-basel

The article has changed 4 times. There is an RSS feed of changes available.

Version 0 Version 1
Banks get new year's boost as liquidity rules relaxed Banks get new year's boost as liquidity rules relaxed
(35 minutes later)
When banks describe an announcement from a major international regulator as a "twelfth night present" there is little wonder that the impression is that they have once again outwitted their regulators.When banks describe an announcement from a major international regulator as a "twelfth night present" there is little wonder that the impression is that they have once again outwitted their regulators.
The decision by the 27 bodies that make up the Bank for International Settlements (BIS) committee of banking supervisors to give banks another four years to build up their liquidity buffers – and count more types of assets as "liquid" – comes after months of lobbying. The decision by the 27 bodies that make up the Bank for International Settlements (BIS) committee of banking supervisors to give banks a further four years to build up their liquidity buffers – and count more types of assets as "liquid" – comes after months of lobbying.
From the outset banks had complained that being asked to build up a pot of assets that are so easy to sell that it would allow the bank to survive for a 30 day credit crunch would restrict their ability to lend to households and businesses. Four years on, the banks will now no longer need to meet new rules by 2015 but instead be given the deadline of 2019 – the same as the one set by the BIS committee based in Basel, Switzerland for requirements to hold more capital. From the outset banks had complained that being asked to build up a pot of assets that are so easy to sell that it would allow the bank to survive for a 30-day credit crunch would restrict their ability to lend to households and businesses. Four years on, the banks will now no longer need to meet new rules by 2015 but instead be given the deadline of 2019 – the same as the one set by the BIS committee based in Basel, Switzerland for requirements to hold more capital.
The rules were devised with events such as the run on Northern Rock in mind - the bank ran out ways to fund itself (although the problem was also due to capital levels). The reality is economies were not expected to be so fragile five years after the run on the Rock. The rules were devised with events such as the run on Northern Rock in mind; the bank ran out of ways to fund itself (although the problem was also due to capital levels). The reality is that economies were not expected to be so fragile five years after the run on the Rock.
Global regulators will argue they are being pragmatic, and as outgoing governor of the Bank of England Sir Mervyn King put it last night, there are now rules for the first time on how much and what type of liquid instruments can be held.Global regulators will argue they are being pragmatic, and as outgoing governor of the Bank of England Sir Mervyn King put it last night, there are now rules for the first time on how much and what type of liquid instruments can be held.
Even before this climbdown, the Financial Policy Committee inside the Bank of England that King chairs has been mulling relaxing the liquidity rules since the summer. Even so, the stock market reaction says it all: bank shares topped the FTSE 100 leaderboard in early trading on Monday.Even before this climbdown, the Financial Policy Committee inside the Bank of England that King chairs has been mulling relaxing the liquidity rules since the summer. Even so, the stock market reaction says it all: bank shares topped the FTSE 100 leaderboard in early trading on Monday.