Basel III banking rules needed but not enough: Basel Committee

New international rules drawn up in response to the 2008 financial crisis, known as Basel III, are vital to nursing the global banking system back to health, but more is needed, the head of the Basel Committee on Banking Supervision said.

"With Basel III, we have laid the foundation with a strong set of minimum standards. But they are exactly that -- minimum standards. They are necessary but not sufficient," Wayne Byres said in an address to a Financial Stability Institute conference on risk management and supervision in Basel.

The Basel III international banking regulations, which are aimed at strengthening the ability of banks to withstand future crises and to reduce concerns about European banks, are to be phased in from 2013 to 2019.

Among other things, they call for banks to maintain higher levels of higher-quality capital, with minimum top-rated common equity holdings at banks increasing from 2.0 per cent to 7.0 per cent of risk weighted assets.

The new rules also demand improved risk coverage, especially for complex illiquid trading activities.

In Byres' speech, a transcript of which was obtained by AFP, he compared the new rules to an exercise regime aimed at getting back into shape an unhealthy person who has been living too long on junk food and not exercising.