Barclays has enough capital for Basel III requirements

Stricter banking rules are likely to raise funding costs for banks, Bob Diamond, the boss of Barclays's investment banking arm, Barclays Capital, warned on Thursday.Diamond, who is due to take over as chief executive officer of Barclays when John Varley steps down, told the Bank of America Merrill Lynch Banking & Insurance CEO Conference in London that the new capital rules, commonly referred to as "Basel III", due to be phased in from 2013 could add as much as £60bn to Barclays' risk-weighted assets (RWA) in assessing market risk, while the total impact of all the reforms, set to be fully implemented by 2019, could add up to £150bn to the bank's RWA.Despite the added burden Diamond said he believed the bank has enough capital to meet the more stringent requirements. "Of course we have a lot of work to do to adapt to the new Basel framework but from what we know and can see today we believe we have enough equity capital and it is not our objective to turn to our shareholders for more," Diamond said.The Basel III framework will require banks to more than double their capital reserves in a move designed to prevent a repeat of the near collapse of the banking system in 2007.Diamond thinks the new regulations will force a change of attitude among banks, with an increased emphasis on service, as it becomes harder to compete on cost. "Customers' decisions will be relationship led, not transaction or price led," Diamond predicted.