FRANKFURT — New international regulations on how much capital banks must hold will initially make borrowing more expensive and dampen economic growth, according to two studies released Wednesday by the central bankers and regulators writing the rules.
But the economic effects will be smaller than feared, and eventually, stricter regulations will lead to stronger growth by preventing bank crises, the studies said.
The studies published by the Financial Stability Board and the Basel Committee on Banking Supervision, whose members include central bankers and regulators from the United States, Europe, China and most other major countries, contradicted assertions by the banking industry that the new regulations would throttle growth.
The estimated effects on output of the proposed rules “are significantly smaller than some comparable estimates published by banking-industry groups,” said a study led by Stephen Cecchetti, head of the monetary and economic department of the Bank for International Settlements in Basel, Switzerland, which hosts the Basel Committee.
The study found that the impact on gross domestic product would be only about one-eighth that estimated by the Institute of International Finance, a banking-industry group whose chairman is Josef Ackermann, chief executive of Deutsche Bank in Frankfurt.
Proposals made by the Basel Committee in July require banks to hold $3 in capital for every $100 they lend and tighten requirements for the kinds of assets that qualify as capital. The rules also require banks to increase their holdings of liquid assets that can be easily traded to raise money. But the rules on capital would not take full effect until 2018. The New York Times
