WHEN: Today, September 30th at 8am ET
WHERE: CNBC's "Squawk Box"
Following is the unofficial transcript of breaking news from CNBC's Steve Liesman, Senior Economics Reporter. All references must be sourced to CNBC.
JOHN HARWOOD: STEVE LIESMAN JOINS US WITH BREAKING NEWS ON WHAT THE WORLD'S FINANCE MINISTERS AND CENTRAL BANKERS ARE TALKING ABOUT BEHIND THE SCENES.
STEVE LIESMAN: JOHN THANKS, CNBC LEARNED THAT G-20 FINANCE MINISTERS AND CENTRAL BANKERS WILL DISCUSS NEXT MONTH SETTING CAPITAL LEVELS 2 TO 3 PERCENTAGE POINTS HIGHER FOR WORLD'S BIGGEST BANKS. THIS WOULD BE IN ADDITION TO THE HIGHER CAPITAL LEVELS ALREADY AGREED TO UNDER BASEL III ACCORDS. A SENIOR INTERNATIONAL FINANCE OFFICIAL WITH KNOWLEDGE OF THE DISCUSSIONS TELLING CNBC THAT A PROPOSAL TO SET HIGHER CAPITAL LEVELS FOR SYSTEMICALLY IMPORTANT INSTITUTIONS IS VERY MUCH ALIVE AND BACKED BY MULTIPLE COUNTRIES INCLUDING THE U.S. AND UK. SOME COUNTRIES SAID TO OPPOSE THE MEASURE INCLUDING GERMANY, FRANCE AND JAPAN. U.S. OFFICIALS GENERALLY SUPPORTED A PROPOSAL TO PUT THE HIGHER CHARGES ON THE BIG BANKS BUT WOULD NOT COMMENT ON THE LEVEL OF 2% TO 3% WHICH IS WHAT WE LEARNED. THEY ALSO SAID THEY HAVE CONCERNS THAT OTHER COUNTRIES WILL NOT FOLLOW THROUGH AND SAID THEY WILL NOT PUT U.S. BANKS AT A COMPETITIVE DISADVANTAGE IN THESE GLOBAL TALKS. SENIOR INTERNATIONAL OFFICIAL TODAY SAYING IT IS LIKELY BUT NOT ASSURED SOME AGREEMENT WOULD COME OUT OF AN OCTOBER 19th MEETING IN KOREA OF FINANCE MINISTERS AND CENTRAL BANKERS.THE CAPITAL CHARGE WOULD THEN BE ADOPTED BY G-20 LEADERS WHEN THEY MEET IN KOREA IN NOVEMBER. THEY'RE EXPECTED AT THE SAME MEETING THERE TO APPROVE THE OTHER BASEL III ACCORDS. WHICH RAISE CAPITAL STANDARDS AND LEVELS FOR ALL BANKS. IMF MANAGING DIRECTOR JOHN LIPSKY IN A CLOSED DOOR SPEECH MONDAY MENTIONED WHAT HE CALLED SYSTEMIC CAPITAL CHARGES AND LEVIES TO DISCOURAGE BANKS FROM BUILDING UP RISK. THOSE CAPITAL CHARGES COULD STRENGTHEN BANKS BALANCE SHEETS AND MAKE THEM ABLE TO WITHSTAND A CRISIS BUT THE LEVIES COULD PAY FOR A RESOLUTION FUND TO WIND DOWN BIG BANKS IN THE EVENT OF A CRISIS. A LOT UNCERTAIN ABOUT THIS PROPOSAL INCLUDING WHAT BANKS ARE DESIGNATED AS SYSTEMICALLY IMPORTANT. UNDER WHAT CRITERIA ARE THEY DESIGNATED SO AND WHAT IS THE TIMEFRAME FOR POSING THESE REQUIREMENTS? THE SENIOR OFFICIAL EXPECTED 20 TO 25 BANKS AROUND THE WORLD TO BE DESIGNATED AS SYSTEMICALLY IMPORTANT AND FORCED TO PAY THAT EXTRA CAPITAL CHARGE.SO THIS IS WHAT THEY'RE TALKING ABOUT. THIS IS THE PROPOSAL ON THE TABLE. IT'S ALIVE.IT'S TWO TO THREE POINTS AND GOING TO HAVE AN IMPACT SOMETIME.
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