Don't Fear the Taper, IMF's Lagarde Says; Basel Adds Simpl...

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Basel: Tacitly acknowledging that risk-based capital measures are susceptible to manipulation, the Basel Committee announced a supplementary, simple 3% equity-to-assets requirement that banks worldwide will have to achieve by 2018. Disclosures of leverage ratios under the new formula are to start in 2015. Investment banks will have to count derivatives on a gross basis, rather than netting out collateral or offsetting trades. This will make the U.S. firms look more leveraged than...