Nowotny Says New Basel Rules on Corporate Loans `Very Dangerous'
- Regulators should analyze costs and benefits of measures
- `Full picture' of regulatory initiatives must be considered
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Europe should fight to retain the looser capital rules on corporate loans in a global review of regulation of how banks account for credit risks, European Central Bank Governing Council member Ewald Nowotny said.
Companies in Europe depend overwhelmingly on bank loans and capital markets aren’t developed enough to replace that funding channel quickly, especially for small and medium-sized companies, Nowotny, the 71 year-old governor of the Austrian central bank, said in an interview in Vienna yesterday. Hence the continent is sensitive to changes in rules for corporate lending, he said.