By YOUNG MONEY Staff
12 September 2011

A new report from one of the leading global banking groups suggests that the impact of recent and upcoming reforms could cause a substantial loss in economic activity, according to Reuters.

The Institute of International Finance released its analysis on Tuesday, September 6, suggesting that proposed regulations could slow economic growth substantially, leading to 3.2 percent lower economic output than without any such reforms. This contrasts sharply with the report from the Basel Committee on Banking Supervisions, which expects reduced growth of no more than 0.32 percent, according to The Wall Street Journal.

The new reports suggests the recent reforms could result in the loss of as many as 7.5 million jobs in the U.S., E.U., U.K., Japan and Switzerland.

"It is critically important that the macro-economic impact of additional regulatory measure under discussion, as well as the impact of approaches to implement measures already taken, be a major consideration for government and regulatory authorities," Josef Ackermann, chief executive of Deutsche Bank, said in a statement.

The Journal notes the timing of the report is likely not coincidental, as support for banking reform has waned as credit markets tighten.