Would you pls explain what the following sentence means "Basel III aims to sharply deleverage the economy which threatens economic growth at the same time as the debt crisis puts a pressure on governments to spend less." ?
It means that two of the things that boost economic growth (albeit temporarily) are personal borrowing (and spending) and government borrowing (and spending). At the present time, Basel III is restricting banks ability to expand their balance sheets by giving new loans to the public and to corporates, and massive government debt levels are restricting the governments' ability to borrow and spend more to boost the economy. So we have banks reducing their loan portfolios and governments trying to reduce the amount of new debt, which tends to contract the economy.
