Global regulators propose tighter credit risk rules for banks

Global banking regulators have proposed a more comprehensive set of rules for banks to set aside capital to cover losses from their exposures to other lenders and limit fallout in a crisis. During the financial crisis some banks suffered big losses on their derivatives contracts due to weaker creditworthiness at banks on the other side of their trades. The value of derivatives had to be written down when it became obvious that counterparties may not meet their obligations.

Read the source article at reuters.com

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