European banks urge one-year delay for Basel III rules

GUBBIO, Italy Sat Nov 24, 2012 6:25pm IST

Related Topics

GUBBIO, Italy (Reuters) - European banks have asked the European Commission to postpone the introduction of tougher global bank capital rules by a year to 2014 after U.S. regulators told lenders they did not expect the 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 would force banks to triple the amount of basic capital they hold in a bid to avoid future taxpayer bailouts.

The European Banking Federation sent a letter on November 21 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 the new rules before their U.S. counterparts.

"We are now very troubled over the possible repercussions that the most recent statement from the US Authorities may have for the international competitiveness of Europe's banks," the letter, made available to Reuters on Saturday, 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 said, asking for the introduction of the new rules to be delayed to January1, 2014.

A spokesman for Barnier said the EU would seek a coordinated stance with the United States.

"We will wrap up negotiations in the coming weeks between countries and parliament (on Basel III) and Michel Barnier will seek clarity from the U.S. and work for a coordinated U.S.-EU approach. Basel 3 norms are important for sound and competitive banks in Europe."

The Basel III rules are meant to be phased in from January 2013 but U.S. regulators cast doubt on the timeframe due to a flood of industry comments on the proposals.

"Basel III must be postponed, full stop" said the head of Italy's banking association, 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."

(Reporting By Giselda Vagnoni, additional reporting by John O'Donnell in Brussels, writing by Silvia Aloisi, editing by William Hardy)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Earnings Season

Reuters Showcase

Obama In India

Obama In India

In parting shot, Obama prods India on religious freedom.  Full Article 

Market Rally

Market Rally

Sensex, Nifty hit record high for fifth straight session.  Full Article 

Restructuring

Restructuring

Max India to be split into three separate companies.  Full Article 

India’s Male Tenor

India’s Male Tenor

India’s lone male tenor wants to ‘Indianise’ opera  Full Article 

Indian Equities

Indian Equities

Hornbill raising $250 mln to invest in equities - partner.  Full Article 

Ratings Downgrade

Ratings Downgrade

S&P downgrades Russia's sovereign credit rating to "junk".  Full Article 

Facebook Outage

Facebook Outage

Facebook takes blame for service outages, which hit wider Web.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage