Financial ETFs Soar On New Basel Rules

Now that the financial crisis appears to finally be subsiding, many regulators and economists have shifted their focus away from containment and towards prevention, seeking to ensure that a similar meltdown does not devastate markets again. Over the weekend, regulators finally hammered out a plan to force banks to limit risk and keep more adequate levels of reserves in case of a future crisis in what is popularly being referred to as the Basel III accord. The details of the plan call for minimum capital requirements to double from their current levels of 2% and the total equity ratio to surge from its current 4% to 7%. Firms will also be required to boost their tier one capital ratios up to 6% and will have to develop a 2.5% buffer to protect against future crises. Institutions unable to meet this requirement would be unable to pay dividends but not forced [...] Click here to read the original article on ETFdb.com. Related Stories: Dodd Unveils Reform Bill, Financial ETF (XLF) Yawns Why The Reform Bill Boosted Financial ETFs G-20 Summit, Reform Bill Put Financial ETFs In Focus