Germany clears way for new bank rules

GERMANY - The major remaining barrier to a global shake-up of bank reserves has been removed after the German government agreed to a politically-sensitive compromise over lending to small companies.

Negotiations over Basle II, a rewrite of the rules governing how much capital banks must set aside against loans, were caught up in the German election campaign amid fears that the country's Mittelstand - small businesses - would be hit by a credit crunch.

But a meeting next week of central bankers

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