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German banks want more time for new liquidity rules

An association representing German banks on Wednesday called for an extra year to implement tougher rules that would force them to hold more cash as a buffer against possible financial crises.

The BVR group of private and public banks called for a delay until January 1, 2014 for the entry into force of the so-called Basel III regulations due to the "enormous technical restructuring and implementation work" needed.

The planned implementation at the beginning of 2013 was "no longer realistic" said the group.

Under the Basel III standards, drafted in the wake of the 2008 financial meltdown, banks must hold 30 days of liquidity just in case markets freeze up.

Lenders must also significantly increase their capital-to-assets ratios to strengthen their ability to withstand future financial crises.

The German association also called for more clarity on the creation of a future European-wide banking union, especially the idea of a oversight body for all banks in the eurozone.

At what was billed as a make-or-break summit to save the eurozone in June, EU leaders tasked the European Commission to come up with plans for a banking union, giving the European Central Bank supervisory powers over lenders.

The ECB must "ensure its monetary policy independence is not compromised" and "avoid conflicts of interest", the BVR association said.

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