Will Germany scupper Basle II?

How real is Germany’s threat to veto the proposed Basle 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.

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