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