Big banks will have to set aside more profits or even raise capital as protection against hard times under tighter proposals from international regulators set to be phased in from 2012.

The new rules proposed by the Basel Committee on Banking Supervision will introduce stricter limits on what counts as top-level assets and on risk exposure from trading in derivatives and securities.

Basel committee chairman Nout Wellink said the proposals, released on Thursday, would result in more resilient banks and a sounder banking and financial system.

They will promote a better balance between financial innovation and sustainable growth, he said.

The announcement contained little detail on the size of a planned global leverage ratio which would limit banks' ability to lend but the committee said the new standards would probably take effect by the end of 2012. It said there would be a grace period for transition.

The fully calibrated set of standards will be developed by the end of 2010 to be phased in as financial conditions improve and the economic recovery is assured, with the aim of implementation by end-2012, the committee said in a statement.

The Committee will put in place appropriate phase-in measures and grandfathering arrangements for a sufficiently long period to ensure a smooth transition to the new standards.

Under the plan, the predominant form of top-quality tier one capital must be common shares and retained earnings and limits will apply to other qualifying assets.

Current rules allowing hybrid or debt-like capital to make up 15 percent of tier one assets will be phased out. The United States had wanted to keep hybrid capital as part of core capital, while Europeans believed it should only be common equity.

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In a report released for consultation, the committee made up of bank regulators from more than 20 countries said that under current rules, banks could hold as little as 2 percent of common equity to risky assets.

Banks will be subject to a capital charge for mark-to-market losses associated with a deterioration in the creditworthiness of a counterparty.

The new rules include measures to encourage the build-up of capital buffers in good times that can be drawn down in bad times and a global minimum liquidity standard for internationally active banks.

(Reporting by Sven Egenter, writing by Krista Hughes; Editing by Hugh Lawson)