Banks urge pro-cyclicality review

The subprime crisis has sparked fears that regulators may insist on banks holding higher regulatory capital, a result some bankers insist would choke off lending and push the global economy into a recession.

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Regulators have already mooted further capital charges. The Basel Committee on Banking Supervision, for instance, published a report on April 16, announcing its intention to enhance the capital treatment of complex structured credit products, liquidity facilities to support asset-backed commercial paper conduits and credit exposures held in the trading book.

The crisis has also renewed criticisms over the perceived pro-cyclicality of the Basel II framework. A bank would currently be required to

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