Barron’s – Adding to market volatility next year will be big increases in funding costs for hedge funds and other major brokerage customers of the world’s biggest banks. These higher costs result from new global bank regulations known as Basel III that impose higher liquidity standards on banks and penalize excess leverage. The idea is to address some of the problems that caused the financial crisis.
The new rules, which started to be phased in this year, were hotly contested by the banking lobby, which at one point declared that lenders would either have to raise $110 billion in fresh capital or shed $3.6 trillion in gross assets to maintain compliance.
