Bank association warns capital regulations could throttle lending

German banks may be forced to reduce their lending activity in order to drastically increase their capital base under proposed new regulation, Germany's private banking federation warned on Monday.

Bank association warns capital regulations could throttle lending
Photo: DPA

The possible introduction of a strict ratio linking banks’ capital to their lending activities would be “counter-productive” since banks would be forced to reduce their loans, Germany’s BdB federation said in a statement.

“Going too far would threaten the economic recovery and positive developments on the labour market,” the statement said.

The Switzerland-based Basel Committee – the main international forum for banking regulation – is expected to meet on Tuesday to discuss tighter rules aimed at trying to avert another global financial crisis.

The new rules are set to go for final approval before a meeting of the Group of 20 developed and emerging economies in Seoul in November.

The BdB federation said that implementing all the new regulations would force Germany’s top 10 banks to raise €105 billion ($135 billion).

The German government has expressed some reservations but has not directly opposed the new rules and has said it hopes for a long transition period.


Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Emergency numbers fail in several German states

Callers to the emergency numbers 110 and 112 weren’t able to reach operators Thursday morning in several German states.

The 112 emergency number on an ambulance.
The 112 emergency number on an ambulance. Photo: picture alliance/dpa | Boris Roessler

The emergency number 110 for police and 112 for fire crews failed around the country early Thursday morning, with callers unable to reach emergency operators for urgent assistance between about 4:30 am and 5:40 am local time.

The Office for Civil Protection and Disaster Aid is looking into these outages, which were reported in states including Lower Saxony, Baden-Württemberg, and  Brandenburg, and in major cities like Berlin, Cologne, Hamburg, and Frankfurt. Cologne was further affected by cuts to electricity, drinking water, and regular telephone services. Lower Saxony also saw disruptions to the internal phone networks of police and hospitals.

Emergency services are not reporting any more disturbances and people should be able to once again reach 110 and 112 around the country as normal.

Investigators are looking into the problem, but haven’t yet established a cause or any consequences that may have happened due to the outage. Provider Deutsche Telekom says they have ruled out the possibility of an attack by hackers.