Germans react nervously to new capitalisation rules

The most important European central banks and bank supervisory authorities agreed on tougher capital and liquidity regulations in Basel on Sunday. Germany's Deutsche Bank was the first to react with a capital increase of nearly ten billion euros. The left-liberal daily La Repubblica describes this as a very revealing move: "Of all countries Germany, the stronghold of stringency as regards public finances, is one of the weak links in the private finance sector. … It's no coincidence that the government of German Chancellor Angela Merkel's and her federal bank did their very best … right to the bitter end to secure less rigid regulations in Basel. They know that some of the German banks are among the most unstable and will face high costs as a result of the [Basel III] reform. … It's a pity that of all people the president of the Deutsche Bundesbank [Axel Weber] has been appointed to succeed Jean-Claude Trichet as head of the European Central Bank. But in such contradictory cases Berlin's political clout wins the day."

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