• Germany's news in English

New financial rules to cost banks €50 billion

The Local · 18 Nov 2010, 15:30

Published: 18 Nov 2010 15:30 GMT+01:00

Facebook Twitter Google+ reddit

Under the so-called “Basel III” financial system regulations, banks will have to raise the capital to protect themselves against unforeseen future crises, Bundesbank board member Andreas Dombret told Manager Magazin in an interview published Thursday.

It is the first time there is a concrete total as to how much the tougher regulations will cost. Under Basel III, banks have to come up with larger capital buffers to protect themselves against financial emergencies. In particular, there will be tougher rules about what actually constitutes capital resources.

Leaders signed off on the new regulations at the G20 summit in Seoul last week.

The new multi-billion euro calculation arises from simulations of what would happen in a crisis, which are to be published in the Bundesbank’s financial stability report on November 25.

One part of the additional capital could probably be raised through profits, Dombret said.

“But external capital measures will be called for,” he added.

Dombret also warned against premature assumptions the financial crisis was over.

“We are in the fourth year of the crisis. There is no reason to sound the all-clear.”

The difficult budget situation of many industrial nations represented a serious challenge for the stability of the financial system. Furthermore, the interbank market was still not working fully, he said. Many banks were still dependant on the central bank for liquidity.

Story continues below…

Lower interest rates in the euro zone at the same time carried new risks for financial stability, he said.

“We have to watch very closely where new bubbles develop and what the risks are,” he said.

The Local/dw

The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

09:52 November 22, 2010 by Johnexo
Financial crises is forcing nations to take tougher decisions regarding financial reforms. And tough decisions come at some cost.

Today's headlines
Obama to visit Berlin in last presidential trip to Germany
President Barack Obama and Chancellor Angela Merkel during a Berlin trip in 2013. Photo: DPA.

The White House announced on Tuesday that US President Barack Obama will be paying one last unexpected visit to the German capital - his last before he leaves office.

Hostility towards minorities 'widespread in Bavaria'
A village in southern Bavaria. Photo: DPA.

Hate and hostility towards groups deemed to be different are not just sentiments felt by fringe extremists, a new report on Bavaria shows.

Hated RB Leipzig emerge as shock challengers to Bayern
RB Leipzig. Photo: DPA

RB Leipzig's remarkable unbeaten start to the Bundesliga season has seen them suddenly emerge at the head of the pack chasing reigning champions and league leaders Bayern Munich.

Munich taxi driver in hospital after attack by British tourists
Photo: DPA

A taxi driver had to be hospitalized in Munich on Monday evening after three British tourists refused to pay their fare and then attacked him.

German police carry out nationwide anti-terror raids
Police outside a building in Jena during raids on Tuesday. Photo: DPA

Police forces in five German states carried out raids on Tuesday morning with the aim of tackling the financing of terror groups, police in Thuringia have reported.

The Local List
10 ways German completely messes up your English
Photo: DPA

So you've mastered German, but now it's time to learn English all over again.

Iconic German church being eroded away by human urine
Ulm Minster towering over the rest Ulm surrounding the Danube. Photo: Pixabay

It will now cost you €100 to spend a penny. That’s if you get caught choosing to pee against the world-famous Ulm Minster.

German small arms ammo exports grow ten-fold
Photo: DPA

The government has come in for criticism after new figures revealed that Germany exported ten times the quantity of small arms ammunition in the first half of 2016 as in the same period last year.

14-year-old stabs 'creepy clown' in prank gone wrong
File photo: DPA.

A 16-year-old in Berlin decided he wanted to scare some friends, but his plot backfired in a violent way.

Four Ku Klux Klan groups active in Germany, says govt
An American member of the KKK at a gathering in Georgia. Photo: EPA.

The German government estimates that there are four Ku Klux Klan (KKK) groups currently active in the country, according to a report by the Süddeutsche Zeitung (SZ) on Tuesday.

Germany's 10 most weird and wonderful landmarks
Sponsored Article
Last chance to vote absentee in the US elections
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd