BRUSSELS (Reuters) – The European Commission could propose new rules on bank capital in the European Union by June, to introduce a reform that was agreed globally nearly two years ago, the EU finance commissioner said on Tuesday.
Under the new rules agreed with the United States, and known as Basel III, an “output floor” would limit the extent to which a bank’s capital requirements, based on the lender’s own risk model, can diverge from how they would be calculated under a more conservative model set by regulators.
The aim is to increase banks’ ability to withstand financial shocks.
Valdis Dombrovskis said the EU executive was aiming at making a proposal “in the second quarter of 2020” to turn that reform into EU law.
He called on regulators from the U.S. and other major partners to adopt the key elements of the Basel reform.
He also said the EU will not apply the rules before the end of 2026, fully using the transitional period agreed with global partners.
Dombrovskis called on banks to provide input before the reform is put forward.
” Prudential (LON:) rules could favo
r ‘green’ investments and loans, naturally while keeping prudential considerations in mind,” he said, adding that the reform will take into account “European specificities” to avoid increased capital requirements having a disproportionately negative impact on some specific sectors, business models or activities.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.