WASHINGTON — Federal Reserve Chairman Ben Bernanke said Thursday he welcomed an overhaul of global banking rules known as Basel 3 but added that more work needs to be done.
Speaking to the Senate Banking Committee about the overhaul of U.S. financial regulation, Bernanke said the world’s new finance rules were “moving in the right direction” by requiring financial firms to hold more capital against risky trading.
Global regulators in September approved a landmark overhaul of the world’s financial rules, which forces financial institutions to increase protections against unexpected losses to avoid a repeat of the financial crisis.
Banks face significantly tougher requirements on the capital they must hold in reserve.
The new rules are aimed at curtailing the risky financial activities that contributed to the recent financial crisis and led to the worst economic downturn in decades.
Worried about the weak global recovery, however, regulators agreed to phase in the rules over eight years.
Meanwhile, Bernanke call ed for a swift implementation of the U.S. Dodd-Frank financial-overhaul law, praising it for addressing critical regulatory gaps that were revealed by the financial crisis.
He and a panel of other U.S. financial regulators, including the heads of the Securities and Exchange Commission and the Commodities Futures Trading Commission, updated committee members on the progress they’ve made on implementing the sweeping rewrite.
