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Banks lead financials higher

28 June 2011 10:47 (UTC +04:00)

Baku. Vahab Rzayev - APA-Economics. Bank stocks rose Monday after global regulators said over the weekend that they intend to increase capital requirements to a lesser extent than some had feared.

After months of worry, bank analysts and investors are finding an international accord directing the worldâ€™s biggest banks to hold extra capital in a manner thatâ€™s viewed as less burdensome than had been expected. Read more about the banksâ€™ relief rally

The new rules are to be phased in over the next seven years.

The biggest and most important banks will have to hold as much as an additional 2.5% of the most strictly defined form of capital on their balance sheets to protect them in event of another crisis, the group of central-bank heads leading the Basel discussions agreed Saturday. The extra capital buffer detailed by the committee brings some clarity to a much-discussed area of global financial reform. Several leaders and bankers have sparred over how much capital is necessary for the banks to hold to ensure a crisis like 2008 is not repeated.