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Study of Basel III impact on GDP queried

Friday 25 February 2011 - by Andrew Hickley


An influential think tank has poured scorn on estimates of the impact of Basel III capital requirements on world GDP by the Bank for International Settlements.

The International Centre for Financial Regulation asserts that conflicts of interest and unknown methodology may undermine the body's prediction that Basel III may only have a modest effect on GDP.

Head of research Richard Reid suggests it is impossible to judge the true impact of Basel on the economy, writing in an opinion piece featured in GFS.

"Did it have an impact? Probably - but given other effects on growth and inflation can we say definitively how much? The answer to that is almost definitely no," Reid writes.

Reid was responding to a recent BIS working paper which states that for each one percentage point rise in Basel capital requirements, there will be a 0.09 loss in state output.


To read the opinion piece, please click here.



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READERS' COMMENTS
2011-04-03 17:45:45 | Anonymous
good