Bank regulators give firms more time



By Agency reporter   Tuesday, 14 Sep 2010

Bank stocks rose worldwide as regulators gave firms more time than analysts expected to comply with stiffer capital requirements aimed at preventing future financial crises.

JPMorgan Chase & Company and Bank of America Corporation led the KBW Bank Index to a 3.3 per cent gain at 10:30 a.m. in New York as all 24 companies climbed.

France‘s Credit Agricole SA and Dexia SA led gains in the Bloomberg Europe Banks and Financial Services Index, which rose 1.9 per cent in London to a one-month high.

The 224-company MSCI AC Asia Pacific Financials Index rose 1.8 per cent, its biggest gain since July 8.

At a meeting in Basel, Switzerland on Monday, regulators reached a compromise that more than doubles capital requirements for the world‘s banks, while giving them as long as eight years to comply in full. Germany had sought to give firms a decade to make the transition, while the United States, United Kingdom and Switzerland pushed for a maximum of five years.

”Extending these deadlines — liquidity, buffers, capital definitions — should be a relief to banks,” said Frederick Cannon, an analyst at KBW Inc. in New York.

Of the 24 U.S. banks represented in the KBW Bank Index, seven, including Bank of America and Citigroup Inc. would fall short of the new ratios based on calculations using the revised definitions of capital, Cannon said in a Sept. 10 report. Sixty- one of the 62 largest U.S. banks would meet the new standards, Richard Bove, an analyst at Rochdale Securities LLC, said in a Bloomberg Television interview. He didn‘t identify which one didn‘t meet the standards.

Source: The Punch



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