Basel III Rules will Stifle Banks, says NYU Stern Prof. Tony Saunders

NYU Stern Professor Tony Saunders recently spoke at the Financial Services Institute of Australia Conference, discussing new Basel III policies. Saunders argues that new Basel III limitations on banks will stifle growth, making banks more akin to low-growth utility companies. The Australian Financial Review writes:

“New global rules that will force banks to hold more money in reserve will turn them into low-growth “public utilities” that will not be worth investing in, a leading international¬† expert has warned. Anthony Saunders, a professor of finance at the Stern School of¬† Business at New York University, told a conference in Sydney this week that the so-called Basel III reforms would transform banks into low-return companies for investors. “Why should you invest in a bank when the return on equity will be so low?” Professor Saunders said in a speech to a Financial Services Institute of Australia conference. “Why not just invest in a public utility like a gas company?””

Read the entire article on the Australian Financial Review.

This entry was posted in Credit Risk, Regulatory Risk and tagged , . Bookmark the permalink.