BIS economist tempers expectations of Basel III effects

06/1/2010 | Reuters

Insiders warned that capital rules for banks proposed by the Basel Committee on Banking Supervision would hinder economic growth and have other negative effects, but an economist at the Bank for International Settlements suggested otherwise. "The net impact of the Basel Committee reforms on growth will be negligible," said Stephen Cecchetti, chief economic adviser to the BIS. "Our preliminary assessment is that improvements to the resilience of the financial system will not permanently affect growth -- except for possibly making it higher."

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