Bloomberg News

Domestic Banks May Face Global Capital Rules, FSB’s Carney Says

January 10, 2012

Jan. 10 (Bloomberg) -- Mark Carney, the chairman of the Financial Stability Board, said that smaller domestic banks may face similar capital rules to measures planned for globally systemic lenders whose collapse would create economic turmoil.

The “framework should be in place for domestically systemically important banks by the end of the year,” Carney said in Basel today. The board will also extend requirements for the largest banks to other kinds of financial institutions.

“Despite the important steps that have been taken over the last couple of years, we are all aware that, in the short term, vulnerabilities remain,” Carney said.

Banks including HSBC Holdings Plc, Citigroup Inc. and BNP Paribas SA have warned that plans by global regulators to impose extra capital requirements on systemically important lenders operating internationally could force them to cut loans to businesses and support to trade.

The FSB will also set up a group to examine cross-border disputes over rules governing banker pay, Carney said, acknowledging an “enduring mistrust” between banks and regulators over how lenders set their pay.

Carney said that the board may not replace former Swiss National Bank Governor and FSB Deputy Chairman Philipp Hildebrand, following his resignation this week over a currency trades made by his wife.

The decision will be taken “in the fullness of time and in consultation with G20.”

--Editors: Peter Chapman

To contact the reporters on this story: Jim Brunsden in Brussels at Ben Moshinsky in London at

To contact the editor responsible for this story: Anthony Aarons at

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