Proposed rules will cost non-financial firms billions on both sides of Atlantic. US lawmakers move to exclude end-users

Separating utility and casino banking seen as way to end ‘too-big-to-fail’ trap. Less supervision, more competition proposed

The G20 affirmed sound principles for pay and bonuses, but how practical are they in a competitive marketplace?

GOTHENBURG – The goal of creating a stronger and more unified system of macro and micro-supervision within the EU moved several steps closer in late September when the European Commission submitted precise legislative proposals; and a working group of government representatives from the 27 member countries began detailed scrutiny of them. Mats Odell, Sweden’s minister of local government and financial markets, made it clear that his country – which currently holds the rotating six-monthly presidency of the European Council – intends to push hard for full political agreement at government level by the end of the year.

WASHINGTON, September 23 (Global Risk Regulator) – US proposals for a new international agreement on bank capital standards won’t put US firms in a position where their competitors would profit by operating with lower standards, US Treasury Secretary Tim Geithner told a Congressional panel today.

LONDON, September 21 (Global Risk Regulator) – The Basel II bank capital regime is evolving and was not a contributory factor in the global financial crisis, according to a top international banking regulator who played a key role in developing the international bank safety rules.

By Nick Paraskeva for Global Risk Regulator

As well as reflecting the need for earlier recognition of loan losses to ensure robust provisions, a new accounting rule on valuing financial assets should recognise that fair value is not effective when markets are dislocated or illiquid, according to the Basel Committee’s guiding principles for replacing the IAS 39 rule.

BASEL ¡V In a crucial early September move, major countries firmly backed global banking regulators in efforts to strengthen the global banking system, and provided clear direction on two contentious issues of the quality of bank capital and the use of a leverage ratio.

LONDON – Finance ministers of the Group of Twenty (G20) leading economies agreed on strengthening the financial system at their early September meeting in London, but their final communiqué papered over differences on key issues. As GRR went to press, the ministers, meeting ahead of the end-September G20 leaders summit due to be hosted by US President Barack Obama, backed the principle of setting global standards on pay and rewards in the financial sector, including provisions for clawing back bonuses if an employee’s activities eventually prove loss-making.