Basel’s new 7% equity capital minimum welcomed

Banks are relieved at new minimum capital requirements announced by Basel on September 12, but there are concerns about investor reaction

Relief was the immediate reaction from banks when the Basel Committee on Banking Supervision unveiled new minimum capital requirements on September 12. Although the rules require roughly a tripling of equity capital relative to pre-crisis levels, many banks have already made strides in that direction and will be given until 2019 to complete the journey. But the announcement has also sparked a debate about whether investors will accept the lower returns that go hand-in-hand with higher equity