In praise of higher capital

The Basel Committee on Banking Supervision finalised new minimum capital levels under Basel III last month. William Perraudin believes the total capital requirement should have been higher

Many had expected the Basel Committee on Banking Supervision to show a Clint Eastwood-like steeliness last month by announcing tough new rules on regulatory capital. But it never quite happened. Instead, the committee announced unchanged total capital levels – although the capital must be of higher quality with a higher proportion of common equity.

Some national regulators will no doubt ratchet-up capital levels by adding local requirements. That is the approach the UK, for one, has always