VoicesAbroad

Source:Reuters Published: 2014-4-8 22:03:01

"Possible gains are small, and it would be hard to get the world's policymakers to play the cooperative (approach)."

James Bullard, president of the Federal Reserve Bank of St. Louis,

explaining that the global economy would see little benefit if the world's central bankers coordinated monetary policy, Reuters reported. To fight a recession and nurse the US economy back to health, the Fed has held short-term interest rates near zero since 2008 while printing trillions of dollars to buy up bonds. This strategy has provoked concern among the world's central banks, particularly in developing economies where some policymakers worry Washington's exotic stimulus programs are destabilizing financial markets. India's central bank chief has argued that the world's central banks should coordinate their policies, but the Fed official Bullard weighed in against this strategy.

"We believe regulators will keep the ratio largely as proposed."

Jaret Seiberg, a policy analyst with Guggenheim Partners in Washington,

commenting on how financial regulators are expected to vote Tuesday to finalize tough requirements for US banks' leverage, Reuters reported. The rules, under consideration by the Federal Reserve, Federal Deposit Insurance Corp and Office of the Comptroller of the Currency, would force banks to fund part of their business through less risky sources such as shareholder equity, rather than by borrowing money. US officials' vote Tuesday would implement a portion of the agreement known as the leverage ratio. Unlike risk-based capital rules, leverage limits are calculated as a percentage of a bank's total assets and are seen as harder to game. Analysts expect them to closely follow a July 2013 proposal that called for the eight biggest banks to maintain much higher leverage ratios than were required under the Basel agreement.

"This is another major issue for Deutsche Bank to deal with … Deutsche Bank has done lot of great work on capital but a lot of that has been undone by the rising cost of litigation."

Christopher Wheeler, an analyst at Mediobanca in London,

discussing the possible impact of tighter European rules on Deutsche Bank, Reuters reported. Deutsche Bank may need to set aside billions of euros in additional capital under a proposal from European regulators that could affect the bank's efforts to strengthen its balance sheet and put pressure on dividends. Analysts estimated Germany's biggest bank by market value might need as much as 2.2 billion euros ($3.02 billion) in extra capital to meet the tough new rule from the European Banking Authority.

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