Basel Committee counter-cyclical proposals tie buffers to economic indicators

Bank for International Settlements headquarters, Basel

The Basel Committee on Banking Supervision finished its quarterly meeting last night and has today published a key consultation document on counter-cyclical capital that would see banks build up additional capital in booms to be drawn down in a recession.

Capital buffers were always a central objective of the reforms to the Basel II capital framework, as regulators had been asked by the Group of 20 leading economies to correct the pro-cyclical effects of the current regime, which has seen banks

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