TOP CENTRAL BANKS AGREE TO TOUGHER REGULATIONS

       International central bankrs and regulators establish "new standards" for the global financial insutry in a step to prevent a repeat of the worst economic crisis since the Great Depression.
       The measures should "substantilly reduce the probability and severity of economic and financial streess", a statement released by the Baselbased Bank for International Settlements (BIS) said.
       The drive to revamp regulation comes after excessive risk-taking by the world's banks led to US$1.61 trillion (Bt54.5 trillion) in losses and write-downs, taxpayer-funded bailouts and a global recession. Meeting less than three weeks before a Pittsburgh summit of their nations' leaders, G-20 finance chiefs on Sunday united on a plan to have banks rein in compensation and hold more capital.
       The approval set in motion and enhances revised "basel II" measures finalsed in July, that remedy flaws exposed by the collapse in credit and financial markets last year.
       "The agreements reached today [Sunday] among 27 major countries of the world are essential as they set the new standards for banking regulation and supervision at the global level," said European Central Bank chief Jean - Claude Trichet, who president over the meeting.
       National financial supervisors wre also urged to ensure that pay or compensation for commercial bankers was "properly aligned with long-term performance and prudent risk-taking", added Nout Wellink, the chairman of the Basel Committee and Dutch central bank chief.
       However, the meeting did not set a firm deate for implementation of the package, which will be fleshed out over the coming months.
       The central bank governors and supervisors who met in Basel form the oversight body of the Basel Committee on Banking Supervision.
       A draft of the measures was first unviled in January.
       The principles agreed notably to bolster standards for key "Tier 1" capital requirements for commercial banks to raise their "quality, consistency and trnsparency", the statement said.
       "Banks will be required to move expeditiously to raise the level and quality of capital to the new standards, but in a manner that promotes stability of national banking systems and the broader economy," it added.
       The central bankers endorsed the principle f a minimum global standard to fund liquidity, as well as a framework to oblige banks to build permanent "counter-cyclical" capital buffers that can be used during periods of financial turmoil.
       "These measures will result over time in higher capital and liquidity requirements and less leverage in the banking system, less cyclicality and greater banking sector resilience to stress," said Willink.
       The measures will be detailed by the end of the year and tested and refined through to the end of 2010, according to the statement.
       They will be phased in a manner "that does not impede the recovery of the real economy".
       The central bankers' meeting came swiftly on the heels of a meeting of G-20 finance ministers in London on Saturday that painfully hatched a compromise on bankers' pay and left several financial issues outstanding.
       US Treasury Secretary Tim Geithner notably went to London seeking an agreement ensuring that banks were better prepared for tougher times.
       Amid disagreement in their ranks, the G-20 ministers fell short of capping bankers' pay but pledged to reward long-term, not short-term success. Most of the issues were left for a crucial meeting of G-20 leaders in Pittsburgh on September 24-25.