Will Germany scupper Basel II?

How real is Germany’s threat to veto the proposed Basel II bank capital accord if the country fails to get the concessions it wants on the accord’s treatment of bank lending to small to medium-sized companies (SMEs)?

The consensus among bankers and bank regulators outside Germany is that a solution to the problem will be found without the drama of a veto. But it’s far from an absolute certainty. The German threat shouldn’t be dismissed as mere sabre rattling.

It’s rare for the subject of bank capital/asset ratios as framed by the Basel Committee on Banking Supervision, the architect of Basel II and the body that in effect regulates international banking, to get an airing outside the remoter recesses of