BASEL, Switzerland, Jan. 7 (UPI) -- An international committee of finance regulators in Switzerland said it would back up on new requirements imposed on banks to cushion them against collapse.
Named after the city in Switzerland that is the frequent site for many of the group's meetings, the Basel Committee in 2010 -- at the meeting known as Basel III -- increased the amount of available capital banks needed to withstand pressure from sudden disturbances, like a run on deposits or the failure of another institution, like Lehman Brothers, which collapsed in 2008.
The New York Times reported Monday the group that represents 26 countries voted unanimously to expand the definition of liquid assets, which would make it easier for banks to meet the requirements. The rules now allow a portion of the liquid assets to be made up of mortgage-backed securities. These were viewed as risky when the rules were written.
Banks also have until Jan. 1, 2019, to meet the requirements, rather than Jan. 1, 2015, the previous deadline.
"Nobody set out to make it stronger or weaker, but to make it more realistic," said committee chairman Mervyn King, the governor of the Bank of England.
The rules have no international police force to back them up -- just peer pressure. But some members of the group have complained the United States has been slow to turn Basel Committee agreements into law, as others have done.
Banks lobbied hard to soften the new regulations, which they said were so stringent, they would make it harder to lend money. Others argued banks with better protection against collapse should have an easier time lending money and would attract more investors.