New bank capital rules to have 'modest' GDP impact: BIS

The implementation of tough new capital rules for the world's biggest banks would have a "modest impact" on output, regulators said Monday, noting that their long-term benefits far outweigh their costs. "The transition to stronger capital standards on global systemically important banks is likely to have at most a modest impact on aggregate output, while the benefits from reducing the risk of damaging financial crises will be substantial," said the Basel Committee on Banking Supervision.
In a bid to prevent a repeat of the 2008-2009 financial crisis when governments were forced to bail out banks, regulators agreed in 2010 on Basel III rules requiring all banks to strengthen their capital reserves by raising total core reserves to 7.0 percent from 2.0 percent at the moment.