BASEL- III ON BANKING SUPERVISION

The Basel Committee for Banking Supervision and the Financial Stability Board released two reports on the economic impact of BASEL 3, a new set
of more stringent rules for banks' capital and liquidity. Fending off
complaints from the banks that tighter standards will stifle lending,
the reports suggested that the long-term effects of the measures will
be clearly positive, since they will make financial crises less likely.
The final measures will be presented in November at the G20 summit in
South Korea
The Institute of International Finance, a lobbying group, reckons the proposed “Basel 3” rules might knock 3% off the absolute level of rich-world GDP by 2015, a scary result. A study by the French Banking Federation concluded that the long-term level of GDP would be 6% lower in the euro area.
Basel club of bank regulators, which released detailed new analysis on August 18th. It reckons its new rules will boost the economy in the long run and only slightly dent it in the short run. Stephen Cecchetti, its chief economic adviser, says there were “scores” of economists working on the project. The aim, he says, was “to do a thorough job, with the best technology and using the best people in the world at t

Bank of England says Britain seeing signs of improving credit conditions

There are tentative signs that credit conditions for some British businesses and households may be starting to improve, a Bank of England report suggested yesterday.
latest credit conditions survey found that lending to the corporate sector had increased in the second quarter and lenders expected levels to rise again in the coming three months.
The availability of secured credit to households over the same period also increased, and was expected to rise further in the third quarter. The Bank said the increase in lending in both areas was driven by the improved cost and availability of funds.

"While concerns about the economic outlook had continued to bear down on credit availability, the impact had been smaller than in previous surveys," the report added.
However, despite the rise in credit available to the corporate sector, it did not increase as much as lenders had expected and the commercial property sector in particular experienced a "significant reduction" in credit availability.

US Federal Reserve says increased banking competition has led to more lending

The latest lending survey from the US Federal Reserve has shown the first slackening in lending conditions for smaller American companies since late 2006 as competition between banks increases.
While small and medium-sized British business still complain of a lack of new credit from UK banks, US lenders have begun easing standards and reducing pricing for the first time in nearly four years.
According to the Fed's report, which surveys loan officers at 80 banks, the main reason for the change has been an increase in competition for business this year. Related Articles
The findings add weight to the argument that increasing competition in the banking industry would help improve the flow of credit to British businesses.