Global Banking System To Face Major Changes In 2012
The face of global banking system will soon change,say in about a year or so.As 2012 will not be a easy year for them and banks are pressured to completely change their business models,policies and structures.Banks will be preparing themselves to fulfill the regulatory requirements and this will happen world wide.Recently Federal Reserve had outlined a 173-page report that requires banks with higher capital requirements and stricter risk controls as suggested under Basel III.Under this proposal banks having more than $50 billion in asset value should have a capital cushion equal to 5% of assets.In Asia though things are not so though but in Europe and US regulatory reform is being pushed harder.
It is thought that by the end of next year it will be clear that how Dodd-Frank Act is to be implemented and how it will effect the business model of banks.While UK govt will be adding some more changes in banking regulation.Just to remind you Britain had already suffered 3 major bank failures during credit crisis mortgage lender Northern Rock and two giant banks, Lloyds Banking Group and Royal Bank of Scotland.Under this upcoming legislation banks will have to separate their retail activities and investment banking.These new regulations will cost an extra billions of pounds.