3 Min Read
(Adds further comments from Coen, detail)
PARIS, Feb 22 (Reuters) - Members of the Basel Committee of banking regulators are keen to reach an agreement on the final piece of global capital requirements rules sooner rather than later despite U.S. President Donald Trump's pledge to review the banking rule book.
"All members are interested in bringing this to a conclusion," Basel Committee Secretary General William Coen told the French senate on Wednesday, although he declined to give a deadline.
Central banks and watchdogs around the world have spent the past eight years drawing up regulation aimed at preventing a repeat of the 2007-2009 financial crisis
However, Trump's order to review major banking rules that were put in place after the crisis has raised doubts in Europe and elsewhere that the U.S. would apply the final Basel package.
"There was an executive order signed by President Trump on Feb. 3 that called for full engagement by the U.S. supervisory authorities at the international table, which I read as quite an encouraging sign," Coen said.
"It means that the U.S. is not stepping away from global standard setting".
Nevertheless, approving any deal would be difficult until Trump's administration appoints a new top financial supervisor at the Federal Reserve, two people close to the talks told Reuters this month.
The Basel Committee of banking regulators from nearly 30 countries meets on March 1-2.
Last November it was unable to reach a deal to over how to inject more consistency into how banks assess risks from loans to determine the size of their capital buffers.
Coen said that this output floor remains the sticking point.
European bankers say the 'output floor' could hit the region's big banks the hardest, as they typically use their own computer models to calculate capital buffers.
"Given its importance, we are taking the appropriate amount of time to carefully consider a reasonable calibration that is suitable as a global standard," Coen said.
Basel's proposed "floor" for capital is irrespective of what a bank's own model says is the right amount. This means that capital put aside against a loan cannot go below a certain agreed amount that would be required if a bank had used the "standard" approach set out by regulators for totting up risks. (Reporting by Maya Nikolaeva and Julien Ponthus; editing by Jason Neely and Louise Heavens)