20100914 1548 Global Economic News.

Global: Basel regulators to bolster bank capital requirements . Regulators from 27 nations more than doubled their capital requirements for banks, giving lenders as long as eight years to comply in full, as part of international efforts to prevent future financial crises. The Basel Committee on Banking Supervision  will require lenders to have common equity equal to at least 4.5% of assets, weighted according to their risk. Regulators will introduce an additional capital buffer of 2.5% to withstand future stress, the committee said in a statement. Banks that fail to meet that second buffer would be stopped from paying dividends, though not forced to raise cash. (Source: Bloomberg)

U.S: August budget gap narrows to USD 90.5b down 13% YoY from USD 103.6b in August 2009. The gap for the fiscal year that started in October was USD 1.26tr compared with USD 1.37tr last year at the same time. (Source: Bloomberg)

Canada: Employment rose more than forecast in August , led by educators, and the unemployment rate rose as more people entered the workforce. Payrolls rose by 35,800 jobs, the seventh gain in the past eight months, following a drop of 9,300 in July. (Source: Bloomberg)

E.U: Raises growth forecast for 2010 . Europe's economy may grow almost twice as fast as previously forecast this year with a more "moderate" expansion in the second half, the European Commission said. GDP in the 16 nation euro region may increase 1.7% this year instead of a previously projected 0.9%. The region's growth rate may slow by half to 0.5% in the current quarter and weaken to 0.3% in the fourth quarter, it said. (Source: Bloomberg)

China: To allow credit-default swaps while limiting leverage . China will introduce credit-default swaps by year end, allowing banks to hedge risk while restricting the contracts to avoid pitfalls the U.S. credit markets experienced over the last several years, according to an official with a state-backed Chinese financial association. China will limit the amount of leverage used in credit swaps and won't permit the contracts to be written on high-risk assets such as subprime mortgages. Investors in the derivatives also will be required to own the underlying security. (Source: Bloomberg)