Banks see capital requirements spiking on Basel market-risk rules

London

BANKS said that their trading desks face major increases in capital requirements, and global regulators underestimated the impact of their own rules.

The Basel Committee on Banking Supervision's rule for bonds, derivatives and other securities that banks trade could result in firms needing as much as 2.4 times current capital levels for those activities, according to an industry study led by the International Swaps and Derivatives Association (ISDA). That compares with Basel's own estimate of a weighted mean increase of 40 per cent.