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The German banks will lend even less as government plan to push ahead with Basel III

The German cabinet has announced its intention to push ahead with Basel III regulations for its financial service providers, despite ongoing concerns about the rules from the country's banks. Officials will require lenders to increase their highest-quality capital from two to seven per cent of the risky assets they hold as part of efforts protect against future financial shocks.

A statement by finance minister Wolfgang Schaeuble indicates the introduction of more stringent controls on capital requirements will result in tougher sanctions and controls for banks.

"It is our firm conviction that the implementation of Basel III is a central part of bank regulation that we cannot subject to delay," Mr Schaeuble states, although Reuters indicates German banks are concerned about how Basel III rules will be implemented across the rest of Europe and put them at a disadvantage.

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