At a conference hosted by the European Banking Federation (EBF) on Thursday 29 September, the Commissioner for Financial Services, Valdis Dombrovskis, said that the proposed reforms to finalise the Basel III framework currently on the table of the Basel Committee would imply "significant capital requirement increases in all areas".
The commissioner went on to say that it was important for the global regulators to take account of the wide range of commercial models present in the European banking system, which is characterised by very different risk levels. He stressed that ironing out the average risk weightings throughout the world cannot be the solution. On the version currently under negotiation, he said that the provisions on the "general treatment of real estate loans, corporate lending and infrastructure lending" needed to be reworked. Additionally, the introduction of a standardised capital floor should not constitute a vital part of the regulatory framework currently being devised, the European Commission believes.
The finalisation of the Basel III reform of the banking prudential framework should be finished by the end of 2016 and will be embedded in European legislation after that. At the end of August, the EBF warned of an excessively expensive reform for EU banks, which has been put at €860 billion in additional optimum quality capital.
Picking up the baton from Lord Hill, who initiated an impact assessment of the financial regulations, Dombrovskis said that the Commission would take position before the end of the year (see EUROPE 11552). He said that the prudential rules should be adapted to make them more proportionate and to stimulate the financing of the economy.
Again before the end of 2016, the Commission will present its legislative proposal on the resolution of the central counterparties. (Original version in French by Mathieu Bion)