Canada Banks To Buy Back $71B Under Basel

Canadian banks are required to redeem or convert over $71 billion in securities that do not comply with new Basel III requirements.

Canadian banks are required to redeem or convert over $71 billion in securities that do not comply with new Basel III requirements, The Wall Street Journal reports. The rules that will be phased in the starting of 2013, will force banks to hold more capital on their balance sheets and reduce their holdings of innovative investments, such as hybrid debt-equity securities.

The banks worldwide should hold a minimum tier one common equity ratio of 7% by 2019, as per the new Basel III rules. In case, the capital raised between Sept. 12, 2010 and Jan. 1, 2013 does not meet one or more of the Basel III capital rules, other than non-viability contingent capital requirements, it will be excluded from regulatory capital as of Jan. 1, 2013 and not be subject to the phase-out requirements.

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