LONDON (Reuters) - There is no rush to complete new bank capital rules given that the Trump administration has yet to nominate the U.S. Federal Reserve’s new top banking supervisor, a Bundesbank board member said on Friday.
The Basel Committee of banking supervisors from across the world had hoped to complete the rules in January, but stumbled over one element yet to be resolved by its oversight body.
Daniel Tarullo, a Federal Reserve governor who has been closely involved in banking rules, is stepping down in early April and his replacement, who would sit on the oversight body, has not been announced.
“This person will probably need some time to clarify his or her position, and then we will see where we are,” Bundesbank board member Andreas Dombret said during a visit to London.
“We are not in a rush to do something tomorrow. Neither side is in a rush. We have to put quality over speed,” Dombret, who sits on the Basel Committee, told reporters.
President Donald Trump has signed an executive order calling for existing bank capital rules to be reviewed in a bid to encourage banks to lend more.
This has raised doubts over whether the outstanding rules will ever get approved or be applied by the world’s most important financial market.
Banks have dubbed the remaining capital rules “Basel IV”, meaning a step change in capital on Basel III, the existing set of rules that were rushed through after the 2007-2009 banking crisis to toughen up capital requirements.
Dombret said the new rules would not represent a significant increase in capital.
Basel has said the aim of the outstanding rules is to iron out big differences in the way banks assess risks from loans, a key calculation that determines the size of their capital buffers.
Reporting by Huw Jones; Editing by Tom Heneghan