Major banks told they need to hold more extra capitalNovember 2, 2012 - 14:21 AMT PanARMENIAN.Net - Citigroup, Deutsche Bank, HSBC and JPMorgan Chase have been told by global regulators that they need to hold more extra capital than their rivals, BBC News reported. The four will need to hold 2.5% of common equity as a percentage of assets, on top of the new 7% buffer generally recommended. The advice comes from the Financial Stability Board (FSB), a Group of 20 (G20) developed nations' task force. It said recent scandals showed risks were not being covered properly. The instruction from the FSB comes as G20 finance ministers prepare to meet in Mexico over the weekend to consider what else needs to be done to protect taxpayers against banking excesses. The four names are on a list of 28 banks deemed so large and complex they need a bigger buffer than smaller, less globally important banks. Barclays and BNP Paribas were told to have the next highest level of buffer at 2%, with eight others told to hold 1.5% above the minimum. The FSB's latest list no longer includes three institutions, including Lloyds, Commerzbank and Dexia because the range of their activities has been reducing in scope and size. Holding back reserves leaves less money for lending, but also means less money is put at risk. A release of credit on a massive scale was the key reason for the international credit crisis five years ago, which took billions of dollars of government money to alleviate. The FSB's requirements will come into effect in 2016 and will be revised twice more before then. Large banks are building capital to meet new requirements known as "Basel III". Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | Putin congratulates Pashinyan’s birthday Russian President Vladimir Putin congratulated Armenian Prime Minister Nikol Pashinyan on his birthday on June 1. Opposition motorcade en route to Gyumri for large rally A motorcade of protesters headed by Archbishop Bagrat Galstanyan is heading to the city of Gyumri. Ruling MPs, Foreign Minister talk Armenia-Azerbaijan processes MOs from the ruling Civil Contract party met with the Foreign Minister Ararat Mirzoyan in the Armenian parliament. Russia: Armenia’s frozen membership weakens CSTO position in Caucasus A Russian envoy said any step that could alienate the CSTO member states from each other is “deeply wrong”. |