Basel III economic benefits to be considered alongside costs

The new 'Basel III' rules for banks' capital and liquidity should tighten lending and reduce investment during a transition period, but to a much lower degree than forecast by banks, Basel and the Financial Stability (FSB) said. Chairman Wellink said "economic benefits of the proposed reforms are substantial and need to be considered alongside the analysis of the costs." The FSB published a report assessing the macroeconomic impact of the proposed rules.

Germany postponed its decision on the nuclear power tax to give the government more time to talk to utilities, which were furious about the proposal. The four biggest utilities had last week proposed an alternative payment method in return for being allowed to extend the lifespan of existing nuclear plants. As part of its €80bn austerity plan, the government's goal is to raise €2.3bn a year by taxing the nuclear power industry. The government is now expected to decide by the end of September instead of the start of the month. Chancellor Merkel is committed to deliver the budget consolidation plans announced.