Deutsche Bank AG wants regulators to implement Basel III rules on capital as planned as Germany’s biggest bank seeks to maintain loans to companies, Juergen Fitschen, the lender’s co-chief executive officer, said.
“Basel III gives us an especially sensible set of rules because it allows a sufficient transition period,” Fitschen said today in a speech in Frankfurt. “I hope that from January next year, when the rules take effect, we’ll be on a path that allows us to reach the goals without major disruption.”
Global regulators are ordering lenders to raise capital and cut risk to prevent a repeat of the taxpayer-funded bank bailouts in the financial crisis sparked by the 2007 meltdown of the U.S. housing market. The rules may make credit costlier, and regulators don’t need to add other goals, as Europe’s top banking regulator did by calling for banks to boost capital as a response to the sovereign debt crisis, Fitschen said.
Banks worldwide will be required to hold common equity of at least 7 percent of risk-weighted assets by 2019 when the new rules from the Basel Committee on Banking Supervision take full effect. Firms deemed systemically important such as Deutsche Bank will need more.
The European Banking Authority told banks in December to raise 114.7 billion euros ($142.6 billion) in capital to attain a core Tier 1 ratio of at least 9 percent of risk-weighted assets by June 30 after accounting for writedowns on European sovereign bonds.
“The old process was on a very good path,” Fitschen said. “The EBA doesn’t belong in there. In my opinion it wasn’t needed, didn’t achieve any value and was more of a panic reaction.”
Deutsche Bank has said it plugged the 3.2 billion-euro capital gap identified by the EBA by the end of last year.