Basel capital rules may prompt banks to shrink trading, OCC’s Dugan says

Higher capital requirements that international regulators plan to impose on banks worldwide are likely to push firms to shrink trading activities in favor of lending, U.S. Comptroller of the Currency John Dugan said. The new rules being negotiated by regulators in the Basel Committee on Banking Supervision would have a greater impact on the firms’ so-called trading books, which include stocks, bonds and other securities, Dugan said in an interview. Loans and other debt held until maturity in their banking books would be less affected.

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