Europe, U.S. Spar On Cure for Banks - by Damian Paletta
U.S. and European leaders, who have committed to using the financial crisis to strengthen the global banking system, are increasingly at loggerheads over how much capital the world's largest financial institutions should keep on hand in case of unexpected losses. The outcome of the dispute could determine how competitive banks are in the future -- and how resilient in times of crisis.
Leaders from the Group of 20 industrial and developing nations, who will discuss the issue this week in Pittsburgh, all agree that banks should hold more capital as a cushion against future losses. But fault lines are quickly emerging about the details, with the Europeans complaining that the U.S.'s proposals will put their banks at a disadvantage.
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