EU postpones parts of the stricter banking rules
Published: Tuesday, Jun 18th 2024, 12:50
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The EU Commission wants to postpone the introduction of important parts of the globally coordinated stricter banking regulations by one year. The implementation of the Basel III reforms in the USA is stalling. This now has consequences for Europe.
"I think it has now become clear that there will be a delay in the implementation of Basel in practice in the United States," said EU Financial Markets Commissioner Mairead McGuinness on Tuesday at a joint conference of the European Commission and the European Central Bank (ECB).
"The application of the Basel standards in the US will now most likely start on January 1, 2026 at the earliest. We have therefore decided to make use of the Commission's authorization and postpone the date of application of the market risk rules in the EU by one year to 1 January 2026," said McGuinness.
This concerns new regulations for banks' trading activities. McGuinness argued that this one-year delay would ensure a level playing field worldwide for the major European banks competing with other globally active institutions.
Largest share in EU 2025
The so-called Basel III reform package was introduced at international level following the 2008/2009 financial market crisis in order to reduce risks in the global financial system. For example, banks are now only allowed to use their own models to a limited extent when calculating risks and must successively secure loans to unrated companies with more equity.
The delay of the market risk regulations in the EU by one year should "not be seen as an encouragement to deviate from this international agreement", emphasized McGuinness. "In the EU, we are sticking to our January 1, 2025 date for the majority of the Basel standards to come into force." According to the current timetable, it will be years before the rules take full effect in Europe: The institutions are to implement this gradually by 2032.
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