New regulations could hinder banking stability, say market participants

02 Dec 2010

A repeat of the 2008 liquidity crisis that threatened the global banking system at the time of Lehman Brothers’ collapse could be induced again by incoming banking sector regulations, market participants said at a conference this week.

Uncertainty about when capital levels would trigger write-downs and which investors would take a haircut could jam liquidity in the banking system, according to those attending a conference held by the International Capital Markets Association on November 30.

Regulators are considering proposals to make senior creditors take a ...

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