BANK regulators from Tokyo to Frankfurt are joining forces to resist a U.S.-backed push for stiffer capital rules that could heap billions of dollars of new requirements on lenders.

    Highlighting the stakes, top regulators from Europe, Japan and India are pressing their case in public, shedding light on divisions in the Basel Committee on Banking Supervision as it races to wrap up work this year on the post-crisis capital framework. They want the global standard-setter to soften key proposals for how banks calculate the capital they need to finance lending and trading.

    The proposals now on the table could result in an overall increase of as much as 70 percent in the capital banks must have, said Shunsuke Shirakawa, vice commissioner for international affairs at Japan’s Financial Services Agency, a member of the Basel Committee.

    Disagreement also exists on how much banks should be allowed to borrow against their assets and how far to limit their holdings of government bonds.

    “If you add together all the proposals that have been made, it’s a significant increase no matter how you look at it, and that is a fact,” Shirakawa said. “So there is a need to make adjustments by the end of the year.”

    The United States moved faster than the rest of the world after the 2008 crisis to revamp banking oversight, often seeking stricter standards than global minimums set by the Basel Committee.

    Daniel Tarullo, a Federal Reserve governor, has led the U.S. argument that the proposals under debate this year are essential to preventing the industry from gaming rules by manipulating internal models lenders use to determine their own capital levels.

    The Basel Committee promised in January not to boost capital requirements significantly as it wraps up work this year on bank-leverage limits. (SD-Agencies)