World's New Banking Rules Are 'Welcome Stuff'

The new rules for the world's banking industry emerging from Switzerland today have some real bite to them, writes Felix Salmon at his Reuters financial blog. In broad strokes, banks will be required to hold more capital in reserve to fend off another meltdown. Banks complain that the new standards—also designed to keep them from stockpiling the risky debt blamed for the current mess—will drive down profits and raise the cost of credit for customers. (Details at the Wall Street Journal and the Guardian.)

Let them whine, says Salmon. "This is all very welcome stuff," he writes. "The banks aren’t going to take all this lying down, but I’m hoping their reaction is going to be relatively muted. This is a done deal, now, and they just have to live with it. And the banks which embrace the new standards and are proud of exceeding them will ultimately be more successful than those which try to get around them."