To atone for the gravest misdeeds, according to Catholic tradition, a sinner must spend seven years in purgatory. Bankers had hoped that, after seven years of penance for their part in the financial crisis, the end of wrenching overhauls forced by fierce new regulations might be nigh. But to their dismay, the regulators' zeal is un-dimmed. Far from giving banks respite, they are toughening up old rules and devising new ones, perhaps heralding a new wave of restructuring. Take the vexed question of the level of capital banks should hold to guard against future losses. Higher capital ratios, which force banks to fund their loans and investments more with equity and less with money borrowed from investors or depositors, are one of the main reasons returns have fallen since the crisis (see chart). Yet regulators are still tinkering. They have devised at least four new measures of the strength of banks' balance-sheets since the crisis, including one due to be finalised by the G2O, a club of the world's biggest economies, in November. These all come on top of the higher capital standards included in the latest international agreement on banking regulation, known as Basel Ⅲ.
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