Why German Banks Took Stand Against Basel Capital Floors
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Deutsche Bank, Commerzbank would be among most affected
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‘Setting floors is not the right way,’ says one lobbyist
The twin tower skyscraper headquarter offices of Deutsche Bank AG, right, stand at dusk in Frankfurt.
Photographer: Alex Kraus/Bloomberg/Bloomberg
No wonder Germany is on the warpath against a proposed global standard for how banks calculate the capital they need: Its largest lenders rank among the worst when it comes to how they assess risk.
That means Deutsche Bank AG and Commerzbank AG will be affected more than most big lenders and may have to raise additional capital, if and when the Basel Committee on Banking Supervision implements a proposed floor for how much their risk-weighting of assets can veer from standardized measures. By Deutsche Bank’s own calculations, its risk-weighted assets equal just 28 percent of its balance sheet, compared with 50 percent for the six largest U.S. banks, according to data compiled by Bloomberg…
Why German Banks Took Stand Against Basel Capital Floors
