European Banking Federation has requested a postponement of the introduction of Basel 3 after the United States decided to postpone its application 'sine die'. The announcement was made by Italian Banking Association director general Giovanno Sabatini during a meeting in Gubbio.
On November 21 a two-page letter was sent to the European Commissioner for the Internal Market and Financial Services, Micheal Barnier, to highlight the imbalance between European banks and their US counterparts. ''We are very concerned over the effects that the recent announcement by US authorities could have on the international competitiveness of European banks, especially at a time in which they are facing a radical change in rules for capital requirements, liquidity buffers, leverage ratios and also a new organization of eurozone supervision,'' wrote the head of the European Banking Federation, Christian Clausen, in the letter to Barnier.
''Instead,'' he added, ''our American competitors will not have to abide by the obligations that were at the same time imposed on them, and they will not have to do so in the foreseeable future either. US banks will only have to comply with the capital levels laid down in the original Basel agreement.'' He went on to stress that among European banks, ''given the reluctance shown by the American authorities to implement Basel 2.5, and now Basel 3, there are growing concerns that the American commitment to move towards a more careful system is wavering. In Europe there is much concern ''that unequal competition in the international and domestic capital markets, deriving from varied application of the new rules on capital requirements by the US, would be highly disadvantageous for European banks, the profitability of which is exposed to ever more pressure, and could make them less able to support economic recovery in Europe.'' This is why the federation has asked for a possible ''postponement of the entrance into effect of the new rules until January 2014''.
Note EU-Digest: Many European parliamentarians and advocacy groups reflecting the opinion of their constituencies have expressed the hope that Basel 3 won't get postponed.
They see this as a delaying tactic by the Banking and Financial sector to avoid the implementation of more stringent controls on their activities.
Even if Basel 3 is only accepted by European Governments and not by the US Government it will still influence the US financial and banking sector.
Read more: Latest Online News | Agenzia Giornalistica Italia | AGI
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