U.S. pushes hard for a tough capital ratio for banks in Basel III

08/11/2010 | Reuters

Michael Barr, assistant secretary for financial institutions at the Treasury Department, said the government is seeking a tough capital ratio in international negotiations for banking standards. "In the Basel III negotiations, we are pushing hard to set minimum capital ratios at a level that will represent a significant increase in firms' requirements," Barr said. "These new requirements include the creation of a capital conservation buffer above the minimums, which if breached will restrict firms' ability to pay dividends or buy back stock. Such restrictions will help shore up a firm's capital base before it reaches a point of no return."

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