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Geithner Calls Banks’ Fear Of Rules “Lobbying”

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FRANKFURT (Reuters) – U.S. Treasury Secretary Timothy Geithner told a newspaper that weekend warnings by bankers that overly restrictive capital rules could squeeze lending abilities was pure lobbying, and urged reforms to proceed unabated.

Rules agreed by the Group of 20 rich and developing nations in Pittsburgh on September 25 in the wake of the financial crisis require higher capital requirements for lenders and tighter banking supervision.

In abstracts of an interview with German weekly Die Zeit due to appear on October 8, Geithner said he believed banks’ calls for an easy touch on regulation amounted to “lobbying.” The abstracts appeared on the paper’s website.

There was a risk that authorities were acting too soon, but the greater risk was in failing to sustain the political will for reform, Geithner was quoted as saying.

He said it was not surprising that banks were now arguing they feared for economic growth, but without a stable financial system there could be no efficient allocation of capital.

Deutsche Bank  chief Joseph Ackermann told Der Spiegel magazine that regulators could stifle economic growth if they made excessive moves to regulate banks’ capital requirements.

The head of DSGV, the organization of Germany’s 440 savings banks, Heinrich Haasis, also told reporters at an IMF and World Bank meeting in Istanbul this weekend that tighter capital rules could squeeze loan activity.

ARTICLE CAN BE FOUND HERE.

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