BRUSSELS (Reuters) - European Union finance ministers on Tuesday urged bank regulators not to hit European banks disproportionately as they review global banking rules, but European bankers criticised the EU response as “far too lacklustre”.
The Basel Committee, a body of banking supervisors from nearly 30 countries, is expected to announce the results of its overhaul of international banking rules by the end of 2016.
Ministers at their regular monthly meeting in Brussels said “the reform package would not be expected to result in a significant increase in the overall capital requirements for the banking sector.”
The core of the review is the introduction of models to calculate bank risks based on common standards, rather than on benchmarks developed internally by banks, a change that would hit mostly European banks with higher capital requirements, EU officials and lenders fear.
Ministers insisted that the reform should not result “in significant differences for specific regions of the world.”
Their agreed text was softened compared with earlier versions to avoid excessive frictions with fellow regulators, a move which irked European bankers.
“The finance ministers’ response to the Basel plans is still far too lacklustre,” the head of the European Banking Federation Wim Mijs said.
“In a bank-financed economy like Europe any uncertainty over extra capital requirements directly affects growth prospects. For European banks the Basel Committee’s plans for additional requirements go well beyond what has already been agreed,” he added.
Last week, the French and German banking federations said in a joint document that the new rules “may mean that the capital requirements for banks will rise in some cases by up to a further 50 percent.”
Reporting by Francesco Guarascio; Editing by Alexandra Hudson