Financial Times FT.com

Basel committee looks to close risk loophole

By Paul J Davies and Gillian Tett in London

Published: July 23 2008 02:05 | Last updated: July 23 2008 02:05

Global banking supervisors are seeking to close a regulatory loophole that made it easier for banks around the world to own the complex assets that have caused huge losses during the current credit crisis.

A proposal on Tuesday by the Basel Committee on Banking Supervision could overhaul the way banks calculate risk on their trading books and make it more costly to hold the kind of structured debt products that brought losses to banks such as UBS, Citigroup and Merrill Lynch.

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