Developed economies pose more risk than emerging markets and the difficulties of the West could hurt developing nations' economies, said Standard Chartered Chief Executive Peter Sands. Regulatory changes that complicate business and the slow pace of the recovery are problems for the United States and Europe, Sands told Reuters.
Standard Chartered does most of its business in emerging markets. Although some developing markets have reported extraordinary growth as Western economies struggled to escape recession, they also need the United States and Europe to return to strength, Sands said. "For developing markets to do really well, they need the West to sort itself out," he said. New capital and liquidity rules for banks are complicating the recovery, Sands said.
He estimated trade finance costs could increase by 20 to 40 percent as a result of the so-called Basel III rules, which require banks to hold more capital.
"It's clearly not helpful," he said. "The recovery is going to be a long slog," he said. "This is not going to be a smooth recovery and there are a lot of big issues to be resolved along the way."
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