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Ackermann urges caution over capital safeguards

Deutsche Bank chief executive Josef Ackermann has warned that imposing excessive capital requirements on big banks could damage lending to businesses and potentially hamper the global economic rebound.

Speaking at a meeting of the Institute for International Finance, Dr Ackermann expressed concern about the impending Basel liquidity plans, which he claimed could make it difficult for financial institutions to offer some everyday services.

"The Basel liquidity proposals could undermine banks' ability to provide a range of basic services such as back-up credit lines ... as well as funding for businesses in international trade and a range of retail borrowers," he commented.

Dr Ackermann urged regulators to keep a close eye on the new regulations and their impact on economic growth, suggesting that adapting the legislative framework would bring with it "significant" costs.

Former Bank of France governor and president of policy review group Eurofi Jacques de Larosiere stated in a Financial Times article this week that universal banks were likely to suffer most as a result of the Basel III rules.

By Asim Shah