Bank capital rules face overhaul

The Basel Committee on Banking Supervision approved for consultation December 2009 a package of proposals to strengthen global capital and liquidity regulations with the goal of promoting a more resilient banking sector. Along with the measures taken by the Committee in July 2009 to strengthen the Basel II Framework, the proposals announced today are part of the Committee's comprehensive response to address the lessons of the crisis related to the regulation, supervision and risk management of global banks.

Banks will be blocked from paying bonuses or dividends to shareholders if their capital levels fall below a minimum threshold, under the terms of the more invasive international regulatory regime unveiled.

The Basel Committee on Banking Supervision, which is reviewing the rules governing banks’ strength, said the ban would apply if a bank failed to maintain a buffer of perhaps 25 per cent above a new regulated minimum.

BIS: Press & speeches: Press Releases, 17.12.09: Consultative proposals to strengthen the resilience of the banking sector announced by the Basel Committee http://www.bis.org/press/p091217.htm

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