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So how are the Basel III negotiations going? You know, the ones that would tighten bank capital requirements, reduce leverage, and, in the words of the Wall Street Journal, “have greater implications for banks and the global economy than the U.S. regulatory changes emerging in Washington”? Here’s the latest:

International regulators are moving toward an agreement that would require banks to raise vast sums of new funds to cushion against future losses, but in a concession to the industry and some governments, the rules are likely to take effect later than expected, according to people familiar with the matter.

….France, Germany and Japan have pushed for as much as a 10-year window before the rules go fully into effect, and U.S. and U.K. officials recently have indicated that they would support a gradual time frame, according to people familiar with the matter. “I’m perfectly comfortable with us negotiating reasonable transition period to help make people more comfortable that they can live with those new standards,” U.S. Treasury Secretary Timothy Geithner said Wednesday afternoon in Washington, before leaving for the G-20 meeting.

Hell, even I don’t have any problem with this. And it sounds like no one else does either. If the new requirements are stiff enough to actually make a difference, we’d be nuts to demand that banks adopt them immediately in an environment where growth is already slow, lending is anemic, and raising risk capital is difficult. The real question isn’t so much the timeframe for adopting the new rules, it’s whether the rules are any good. Here’s what we know about that:

Other crucial details remain unresolved, including disputes over the types of funds banks will be allowed to count toward toughened capital and liquidity requirements. Bank executives, sometimes with backing from their governments, have been waging an intense lobbying campaign to water down parts of the so-called Basel proposals, known for the Swiss city in which the accords traditionally have been negotiated.

This is the real battleground, but the Journal doesn’t have anything to tell us about that. The best we have right now, via Felix Salmon, is an article from Global Risk Regulator a few days ago that suggests the Basel negotiators are likely to stick to their guns and issue tough new regulations in the very near future. Keep your fingers crossed.

HERE ARE THE FACTS:

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