Head of Basel panel defends proposed bank rules

New rules on how much rainy-day capital banks must keep in reserve are more rigorous than they first seem and create “a road to a much safer banking system,” the chairman of the panel that is writing the regulations said Wednesday, implicitly answering criticism that the proposals are too lax. The new rules are “extremely demanding” and “radically transform the regulatory capital framework,” Nout Wellink, chairman of the Basel Committee on Banking Supervision and president of the Bank of the Netherlands, said at a meeting in Singapore of officials who regulate the financial industry. “If, prior to the crisis, banks had the levels of capital we are asking for, we likely would not have experienced such a deep crisis,” Mr. Wellink said, according to the text of his speech.

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