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STEVE CHIOTAKIS: Financial leaders from all around the world have agreed to major reforms they say will help head off any future crises. Banks will be told to triple the amount of spare cash -- what's called capital reserves -- they hold on their books. Marketplace's Stephen Beard is with us live from London with the latest. Hi, Stephen.


CHIOTAKIS: So how is this going to affect the United States?

BEARD: Well it's reckoned that seven out of the top 24 banks in the U.S. will fall short of these new rules. Among them, Citigroup and Bank of America. Complying with the rules will probably mean that they will, in the short term at least, have to lend less money. And that does raise the faint specter of a credit crunch. Here's Justin Urquhart Stewart of fund manager Seven Investment.

Justin Urquhart Stewart: Well any constriction on capital at this moment will have an impact. It's the sort of thing that the American community probably doesn't need at this moment. But, on the other hand, it does need to make sure that it has a functional banking system.

And it's worth nothing that the new rules will be phased in over a period of up to eight years. So it's not a sudden jolt to the system that's likely to tip the U.S. back into recession. Germany, by the way, will be more affected. Its 10 biggest banks will fall foul of the rule, so they'll have to lend less or raise more capital.

CHIOTAKIS: And how enforceable are these rules, Stephen?

BEARD: Well banks that fail to comply could be forced to withhold their dividends, so their shareholders won't be happy about that. And their mostly highly-paid employees might have to forgo their bonuses, so it's pretty effective medicine. This reform, by the way, is not actually a done deal. It has to be ratified by a summit of G-20 governments in November.

CHIOTAKIS: Marketplace's Stepen Beard reporting from London. Stephen, thanks.

BEARD: OK Steve.