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SINGAPORE (Reuters) � Asian shares rose on Monday on encouraging economic data out of China and the United States, and as a deal on global bank rules gave lenders some respite before having to raise hundreds of billions of dollars in fresh capital.

Japan's benchmark Nikkei average (.N225) rose 1.4 percent, while the MSCI index of Asian shares outside Japan (.MIAPJ0000PUS) was up 1.6 percent as the data encouraged investors to return to riskier assets.

Chinese factories increased production in August and money growth easily topped analysts' expectations, according to data on Saturday, showing that the economy remained buoyant despite government efforts to clamp down on bank lending and property speculation.

Inflation in China sped to its fastest pace in 22 months, though the bulk of price rises stemmed from higher food costs, which analysts have said should be transitory after a spell of bad weather this summer.

Data on Friday showed U.S. wholesale inventories surged the most in two years in July, adding to signs that economic growth in the third quarter of the year may prove a bit stronger than many forecasters had expected. The U.S. trade gap also narrowed sharply in July.

The reports pushed up major stock indexes on Wall Street by as much as 0.5 percent. (.N)

While the U.S. economy still seems mired in a slow-growth path, recent data have helped dispel some fears that it might be sliding back into recession.

BASEL BUOYS BANK STOCKS

Global bank regulators, aiming to prevent any repeat of the international credit crisis, agreed in Basel, Switzerland, on Sunday to force banks to more than triple the amount of top-quality capital they must hold in reserve.

But to ease the burden, regulators gave the banks transition periods to comply. These periods, extending in some cases to January 2019 or later, are longer than many analysts had expected.

Global bank and top European lender HSBC (0005.HK)(HSBA.L) was up more than 2 percent, with some of Japan's leading banks seeing similar gains.

"It's a mixed blessing for the banks, but I'm sure investors will be happy to get some clarity and allow the market to move on," said Robbert Van Batenburg, head of equity research at Louis Capital Markets in New York, said of the new rules, known as Basel III.

"... The best thing is it removes the uncertainty that was hanging over the market... The markets should take this favorably."

The U.S. Federal Reserve System's Board of Governors said the decision should help minimize future financial meltdowns.

"The agreement represents a significant step forward in reducing the incidence and severity of future financial crises, providing for a more stable banking system that is less prone to excessive risk-taking, and better able to absorb losses while continuing to perform its essential function of providing credit to creditworthy households and businesses."

EURO SURGES

The euro surged following the Basel agreement and the upbeat Chinese data, which also propelled the Australian dollar to its highest in four months against the dollar.

Automatic buy orders triggered at around $1.2720/30 and $1.2750/70 helped extend the euro's rally to nearly 1 percent, but it later faltered at $1.2800.

The euro has been in a downtrend against the dollar all year on concerns about sovereign debt and the European banking system.

"The introduction of the new Basel rules will be years away, so the market's focus will soon shift back to more immediate factors, such as euro zone debt auctions and suspicions on the EU stress test," said Keiji Matsumoto, strategist at Nikko Cordial Securities in Tokyo.

The low-yielding yen faltered as investors moved into riskier assets offering the prospect of stronger returns.

The dollar traded at 84.12 yen, after hitting a 15-year low of 83.34 yen last week. The euro rose to $1.2786, and gained to 107.55 yen.

Gold, a traditional safe haven amid bad economic news, was slightly higher. Spot gold was hovering around $1,246 an ounce at 11:45 p.m. ET.

Oil reached a one-month high, partly as the Chinese data signaled continued strong demand from emerging economies. U.S. crude futures for October climbed 1 percent to $77.20 a barrel.

(Additional reporting by Charlotte Cooper; Editing by Kim Coghill)

BASEL, Switzerland (Reuters) � Global regulators, aiming to prevent any repeat of the international credit crisis, agreed on Sunday to force banks to more than triple the amount of top-quality capital they must hold in reserve.

The biggest change to global banking regulation in decades, known as "Basel III," will require banks to hold top-quality capital totaling 7 percent of their risk-bearing assets, up from just 2 percent under current rules.

The rules may oblige banks to raise hundreds of billions of dollars of fresh capital over the next decade. Germany's banking association, for example, has estimated its 10 biggest banks may need 105 billion euros ($141 billion) of additional capital.

But to ease the burden on banks and financial markets, regulators gave the banks transition periods to comply with the rules. These periods, extending in some cases to January 2019 or later, are longer than many bankers originally expected.

"The agreements reached today are a fundamental strengthening of global capital standards," European Central Bank President Jean-Claude Trichet said. "Their contribution to long-term financial stability and growth will be substantial."

Regulators hope the changes will push banks toward less risky business strategies and ensure they have enough reserves to withstand financial shocks without needing taxpayer bailouts.

But banks say the new requirements could reduce the amount of money they have available to lend out to companies, slowing economic growth in Europe and the United States as those regions recover from the credit crisis.

CAPITAL STANDARDS

Under Basel III, banks will be required to hold top-quality capital -- known as "core Tier 1" capital, and consisting of equity or retained earnings -- worth at least 4.5 percent of assets.

They will also have to build a new, separate "capital conservation buffer" of common equity; this will be 2.5 percent of assets, bringing the total top-quality capital requirement to 7 percent. If they draw down the buffer, they will face curbs on the bonuses and dividends which they can pay out.

Another provision of Basel III, sharply criticized by some banks, will require them to build a separate "countercyclical buffer" of between zero and 2.5 percent when the credit markets are booming.

National regulators will decide when economies have entered such periods of "excess aggregate credit growth." They hope the buffer will slow lending when credit markets threaten to overheat, preventing dangerous bubbles from forming.

Although banks did not get their way on countercyclical buffers, they did appear to succeed in convincing regulators to provide generous transition periods.

The Tier 1 capital rule will take full effect from January 2015, with the capital conservation buffer phased in between January 2016 and January 2019. Some analysts said this showed regulators were caving in to the banks.

"The phasing-in period for the new capital requirements is surprisingly long, which will add to the skepticism about the robustness of the bank capital enhancement efforts," Mohamed El-Erian, co-chief investment officer of bond investment giant PIMCO, told Reuters.

G20 ENDORSEMENT

The Basel III agreement was reached in Switzerland by central bank governors and top supervisors from 27 countries, after a year of horse-trading and lobbying that involved banks and governments seeking to protect their national interests.

Along with the capital standards, Basel III includes a range of reforms agreed earlier this year to reduce risk-taking by banks, including rules on how liquid banks' assets must be and how banks must treat tax assets on their books. Some changes were watered down in July after strenuous lobbying by banks.

After refusing in July to endorse draft Basel III rules, Germany won a key concession on Sunday, receiving a 10-year grace period from 2013 to phase out certain types of bank capital such as "silent participations," which are widely used by its state-backed banking sector but little used elsewhere.

Leaders of the Group of 20 leading countries, blaming the global credit crisis partly on risky trading by banks, called on regulators in 2009 to work on tougher bank capital rules. The G20 leaders are set to endorse Sunday's deal when they meet in Seoul in November.

Most of the world's top banks have to a large degree repaired their balance sheets since the crisis, so they are not expected to need to rush to raise funds in response to Basel III.

But Deutsche Bank, Germany's flagship lender, announced at the weekend that it planned to raise at least 9.8 billion euros to buy the rest of Deutsche Postbank. The fund-raising is seen partly as an effort to tap markets before any Basel-induced cash calls by other banks.

(Additional reporting by Jennifer Ablan; Writing by Huw Jones; Editing by Andrew Torchia)

NEW YORK (Reuters) � Car rental company Hertz Global Holdings Inc (HTZ.N) struck a sweetened $1.56 billion deal to buy Dollar Thrifty Automotive Group Inc (DTG.N) on Sunday, outdoing a rival bid from Avis Budget Group Inc (CAR.N).

Hertz raised its bid for Dollar to $50 per share, including a $10.80 per share increase in the cash component of the offer, and the two sides amended their merger agreement, Hertz spokesman Richard Broome said. The price also includes $122 million of options and restricted shares.

Hertz had in April agreed to buy Dollar Thrifty for about $1.1 billion. Other major provisions of their original deal are unchanged, including a $44.6 million breakup fee payable to Dollar Thrifty if required antitrust clearance is not obtained.

In a move to ensure it will get regulatory clearance for the deal, Hertz has also started the process of divesting its low-cost unit Advantage Rent-a-Car, Broome said.

Hertz said it had already received unsolicited interest from several parties for the Advantage business, which operates in 25 U.S. markets and was bought by Hertz in April last year.

Low-cost brands like Dollar Thrifty -- one of the few major car rental brands to post a profit in 2009 -- have become increasingly important in the car rental industry as consumers try to save money in tight economic times.

Avis, which has been trying to wrest Dollar Thrifty away from the Hertz deal, increased its offer by 3 percent earlier this month to $1.36 billion.

Dollar Thrifty had rebuffed Avis' previous bid, even though that was also higher than its April deal with Hertz, on worries that Avis would not be able to close due to antitrust reasons.

Dollar Thrifty had also said then that Avis' unwillingness to offer it a fee if a deal is not completed was problematic.

Last week, a Delaware court cleared Dollar Thrifty to put its deal with Hertz to a vote by shareholders.

Hertz's latest deal with Dollar Thrifty consists of $43.60 in cash and 0.6366 of a share of Hertz common stock. The cash component includes about $6.87 per share to be paid by Dollar Thrifty as a special dividend just before closing.

Dollar Thrifty has postponed a shareholder vote on the Hertz deal to September 30 from September 16, Broome said.

Hertz, which had set its investor day for September 30, will reschedule it to a later date.

Dollar Thrifty was not immediately available for comment.

(Editing by Dhara Ranasinghe and Muralikumar Anantharaman)

BEIJING (Reuters) � China has made "very, very little" progress on letting the exchange rate of the yuan reflect market forces, Treasury Secretary Timothy Geithner said in remarks published in the Wall Street Journal on Monday.

In an interview conducted on Friday, Geithner was asked if he was satisfied with China's progress on the yuan. He replied: "Of course not."

"China took the very important step in June of signaling that they're going to let the exchange rate start to reflect market forces. But they've done very, very little, they've let it move very, very little in the interim. It's very important to us, and I think it's important to China, I think they recognize this, that you need to let it move up over a sustained period of time."

Geithner is due to testify before the House of Representatives Ways and Means Committee on Thursday to present the Obama administration's latest view of what the United States should do to press China to reform its exchange rate practices.

In the transcript of his comments posted online by the Wall Street Journal, he did not address that issue. The transcript is available at http://ping.fm/N0JqZ .

Geithner's Treasury Department, in three semi-annual reports since President Barack Obama took office, has declined to formally name China a currency manipulator.

Commenting on the state of the U.S. economy, he said it was "healing" but overall growth and job growth were not as fast as the administration would like.

The yuan has risen 0.84 percent since June 19, when the PBOC announced the abolition of a two-year peg to the dollar.

(Editing by Ken Wills)

MONACO (Reuters) � Reinsurers on either side of the Atlantic are divided over what business strategy is best following the financial crisis, as sector valuations plumb long-term depths.

European reinsurers are overhauling their business models, while counterparts in the United States and Bermuda are maintaining their pre-crisis course, said consultancy PWC in a report based on interviews with 18 reinsurance chief executives and presidents.

The difference may reflect the business mix on each side of the Atlantic and looming regulatory changes in Europe, as new rules governing risk and capital management known as Solvency II which come into effect from 2013, PWC said.

The consultancy released its report to coincide with the annual powwow of global property and casualty (P&C) reinsurers, that brings together Europe's Munich Re (MUVGn.DE), Swiss Re (RUKN.VX), Hannover Re (HNRGn.DE) and Scor (SCOR.PA), along with Berkshire Hathaway (BRKa.N), Bermuda's Partner Re (PRE.N), Everest Re (RE.N) and XL Capital (XL.N).

The majority of European reinsurers have started making big changes to their strategy, PWC said.

"There is a focus on strong operating cashflow production, combining growth and profitability across P&C and life," PWC quoted one of the CEOs as saying.

Shareholders were also pushing for tighter controls on underwriting and asset management, with reinsurers sharpening their focus on asset diversification, the consultancy said.

Even marginal business is being more keenly reviewed to ensure it earns adequate return on equity, PWC quoted one executive as saying.

Reinsurers act as a financial backstop to insurance companies, helping to pay for big claims in return for part of insurers' premiums. The sector and the insurance industry in as a whole came through the financial crisis well, compared with banking cousins.

But declining reinsurance prices, low investment returns, nagging fears about the sector's exposure to sovereign debt and hurricane damage, on top of tighter capital rules, have conspired to keep reinsurers out of favor with investors.

The property and casualty sector is trading at a price-to-book ratio below 0.9, more than two standard deviations below its 20-year average, estimates specialist reinsurance broker Guy Carpenter, part of Marsh and McLennan (MMC.N).

(Reporting by Jonathan Gould; Editing by David Holmes)

BASEL, Switzerland (Reuters) � Central bank governors and heads of supervision have reached an agreement on Basel III, a sweeping reform that will force banks to hold more capital to withstand shocks, a source close to the process said on Sunday.

"There is a deal," the source said.

The deal was reached by a group of central bank governors and top supervisors, chaired by European Central Bank President Jean-Claude Trichet.

A formal announcement is expected after 1600 GMT (12:00 p.m. ET). (Reporting by Alexander Huebner; Writing by Huw Jones; Editing by Hugh Lawson)