ECB's Weber hopeful of Basel III deal at weekend

FRANKFURT - Negotiations on the way banks around the world gird themselves for shocks can be wrapped up at the weekend, European Central Bank Governing Council member and Bundesbank head Axel Weber said on Wednesday.

Bankers and investors are eagerly awaiting details of the new rules which will determine how much of a capital cushion banks will have to set aside as a safety net.

"Hopefully we will bring the negotiations to a conclusion at the weekend in Basel," Weber said at the first day of the annual Banks in Transition conference that will attract top executives from the financial world.

Central bank and regulatory officials agreed a proposal for tougher new global bank capital rules on Tuesday but kept the details confidential until Sunday.

The recommendations by the so-called Basel Committee go to the Group of Governors and Heads of Supervision (GHOS), chaired by European Central Bank President Jean-Claude Trichet, which meets in the Swiss city on Sunday.

The recommendations govern how much extra capital banks will have to hold in future to avoid governments having to bail out the sector in the next crisis.

They also cover arrangements for phasing in higher standards on the quality of capital banks must hold in future.

Weber, seen as one of the ECB's heavyweight policymakers, also delivered a cautious message on the euro zone economy, but rebuffed the idea of the bloc falling back into recession.

"I do not share fears of a double recession or deflation," he said.

He warned, however, that it was too early to declare the financial crisis over, saying markets remained characterized by uncertainty and that setbacks could not be ruled out.

He backed German government plans for dealing with insolvent banks and urged regulation to be globally applicable.