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Banks urge EU Commission to postpone capital rules

Brussels, November 25, 2012

European banks have asked the European Commission to postpone the introduction of tougher global bank capital rules by a year to 2014 after US regulators told them they did not expect new regulations to take effect in 2013.

The tougher rules, known as Basel III, are the world's regulatory response to the 2007-09 financial crisis and will force banks to triple their basic capital to avoid future taxpayer bailouts.

The European Banking Federation has sent a letter to EU Internal Market Commissioner Michel Barnier, formally requesting a delay on the grounds that EU banks would be at a competitive disadvantage if they introduced new rules before their US counterparts.

"We are now very troubled over possible repercussions the most recent statement from US authorities may have on the international competitiveness of Europe's banks," the letter said.

It said EU banks were facing sweeping regulatory changes, including new rules on capital requirements and liquidity buffers, and the creation of a EU supervisory authority.

"All the while, our US competitors will not have matching obligations imposed on them in parallel, or in a foreseeable future," it added.

The letter asked for the introduction of new rules to be delayed until January 1, 2014.

A spokesman for Barnier said EU would seek a co-ordinated stance with the US.

"We will wrap up negotiations in the coming weeks between countries and parliament (on Basel III).

"Barnier will seek clarity from the US and work for a co-ordinated US-EU approach.

"Basel III norms are important for sound and competitive banks in Europe," he added.

Basel III rules are meant to be phased in from January 2013.

But US regulators cast doubt on the time-frame due to a flood of industry comments over the proposals.

"Basel III must be postponed, full stop," said Italy's banking association head Giuseppe Mussari at a conference in the central Italian town of Gubbio.

"Clearly, there is no worldwide agreement, so we wouldn't be starting on a level playing field," he added.-Reuters




Tags: banks | agreement | European Commission | Basel |

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