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Regulators propose tougher measures on capital requirements

"Global regulators are cracking down on banks that try to bend capital rules for their trading businesses by proposing new standards for the way lenders assess risk.

"The Basel Committee on Banking Supervision yesterday published a consultation paper that analysts said could have significant repercussions for the way banks run their trading operations.

"It comes after regulators uncovered wide divergences between banks, with some using their complex internal models to minimise the amount of capital they have to set aside.

"The new system will require banks to calculate risks according to a standardised approach in addition to their own in-house methodology. The Committee said it may go further after assessing the effect of its proposals and introduce the standardised approach as a minimum requirement."

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