European Union finance ministers will meet on May 2 in Brussels to hammer out a deal on bank capital and liquidity rules drafted by the Basel Committee on Banking Supervision.
“We want to push this as much as possible,” said Preben Aamann, a spokesman for Denmark’s EU presidency. Ambassadors from the bloc’s 27 nations will hold a preliminary discussion on April 18, he said by telephone in Brussels.
Governments have clashed over proposals by Michel Barnier, the EU’s financial services commissioner, to fix banks’ core- capital requirements at 7 percent of their risk-weighted assets, with limited exceptions for national regulators to set higher thresholds. The U.K. and Sweden say Barnier’s plan would unacceptably restrict national powers, while nations including France and Germany support the commission’s approach.
The Basel committee agreed on the 7 percent requirement in 2010 as part of a set of rule changes in response to the financial crisis that followed the collapse of Lehman Brothers Holdings Inc. The group has said that the agreement should be seen as a minimum, with regulators free to impose tougher rules.
The committee brings together regulators from 27 countries, including the U.S., U.K. and China, to draft prudential requirements for lenders.
Denmark has sought a compromise on the EU version of the Basel rules, proposing that nations could be allowed to force banks to hold up to 10 percent core capital.
The latest Danish proposals, dated April 2, would require national regulators to seek approval from the commission if they want to raise requirements beyond the 10 percent limit.
The draft EU law needs approval from both national governments and lawmakers in the European Parliament before it can take effect.
Source: Bloomberg