Paris, September 13, 2010
Christine Lagarde, Minister for the Economy, Industry and Employment, welcomes the Basel Committee’s historic agreement to make the banks sounder. The Basel Committee proposes to multiply by 3.5 the minimum equity [core tier one ratio] which the banks have to hold in reserve by gradually raising it from 2% to 7%.
Concurrently, the Basel Committee proposes an unprecedented toughening of the oversight of bank liquidity. Thanks to these historic measures banks will be more resistant to economic and financial crises without needing the support of the States.
The Basel Committee’s decision to implement these ambitious requirements gradually will allow the banks to sustain their capacity to lend to the economy and not jeopardize the economic recovery.
Less than 2 years after the collapse of the Lehman Brothers bank and within the timescale desired by the G20, this agreement complies with the September 2009 Pittsburgh G20’s decision to learn the lessons of the crisis by strengthening the quantity and quality of the banks’ capital. The agreement will be put to the heads of State and government at the G20 meeting in Seoul on 11 and 12 November.
Christine Lagarde stresses the importance of every economic area fully implementing the Basel Committee’s rules. “This is essential for financial stability and equality between economic areas”, she stressed./.