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Regulators slacken banking liquidity rule

Regulators slacken banking liquidity rule
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International regulators are allowing banks more room for manouevre over liquidity, after easing off on a proposal that bankers said was too severe.

The committee of banking supervisors in Basel had set a deadline of January 2015 to comply with the new rule that was designed to prevent another financial crisis. It outlined minimum holdings of easily saleable assets and dealt with the supply of credit to business and consumers.

But the committee has watered-down its demands, so now the banks have four more years to build up their cash reserves. That means some of their reserves can be used to help struggling economies grow.

Banking shares rose in value on the news.