1 year, 8 months ago
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What will the new Basel III banking rules mean for the overall US economy?
The third round of Global banking regulations were recently passed in Basel, Switzerland (Basel III). Certain risky economic activities like derivitives are to come under stricter regulation. Banks must keep twice the reserves, from 2%-4% to prop up their balance sheets. What will these regulations mean for the US banking industry, and for the overall economy as a whole?
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The agreement reached recently by Central Bank governors all over the world, known as Basel III, on the overall U.S economy, I think will not affect in the short term, in the sense the rules governing the capital of Banks is expected to be fully complied by January 2019. However, if the Basel III rules are fully implemented, the impact would possibly lessen any uncertainty on the U.S. economy in the foreseeable future.
Furthermore, according to accounts, the new rules will help in developing a much stable banking capitalization and force them to venture into investments that are secure and also provide protection for any future financial crisis.
Accordingly, "banks say the new requirements could reduce the amount of money they have available to lend out to companies, slowing economic growth in Europe and the United States as those regions recover from the credit crisis."
Furthermore, according to accounts, the new rules will help in developing a much stable banking capitalization and force them to venture into investments that are secure and also provide protection for any future financial crisis.
Accordingly, "banks say the new requirements could reduce the amount of money they have available to lend out to companies, slowing economic growth in Europe and the United States as those regions recover from the credit crisis."
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
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