Why German banks stand firm against Basel's capital limits

New York

NO WONDER Germany is on the warpath against a proposed global standard for how banks calculate the capital they need: Its largest lenders rank among the worst when it comes to how they assess risk.

That means Deutsche Bank AG and Commerzbank AG will be affected more than most big lenders and may have to raise additional capital, if and when the Basel Committee on Banking Supervision implements a proposed floor for how much their risk-weighting of assets can veer from standardised measures. By Deutsche Bank's own calculations, its risk-weighted assets equal just 28 per cent of its balance sheet, compared with 50 per cent for the six largest US banks, according to data compiled by Bloomberg.