07 Sep.

Top executives from some of the world’s leading banks are due to gather for a conference in Frankfurt later this week to try to forestall what they see as overly harsh regulation brought on by the global financial crisis.

Existing rules failed to ensure that banks held enough capital and liquidity to withstand the crisis, forcing governments to bail out lenders with taxpayers’ money.

Regulators have been moving to put banks on a shorter leash – a set of rules, called “Basel 3″ – with decisions likely to be made by November.

But banking executives argue that a regulatory crackdown on banks could cut 3% off economic growth over the next five years in the US, the euro zone and Japan, and cost almost 10 million jobs.

Two years after the collapse of Lehman Brothers heralded the global financial system’s breakdown, chief executives at Morgan Stanley, Unicredit and Commerzbank are expected to try to convince the audience at the “Banken im Umbruch” conference that they have done their work to stabilise their banks and should not be thrown back by new banking rules.

Banks’ results have improved vastly this year, as provisions for bad loans dropped due to an improved global economy. But the sustainability of profits is still in doubt amid some fears of a “double-dip” recession.

Source: Reuters