Rating agencies Standard and Poor's and Moody's Investors Service today raised their heads above the parapet and released formal responses to the new Basel rules regulating capital held by banks, with S&P saying that the unintended result could be a pull back in bank lending and derivatives trading, and Moody's warning the rules could pressure banks to raise their risk profile.

The deadline falls tomorrow for responses to a consultation paper published in December, with formal rules to be outlined at the end of this year. Waiting for clarification on the Basel III rules, banks have held off issuing more complicated but useful debt-like contingent capital.