Planned global banking rules aren’t balanced, changes are required

A planned reform of global banking rules discussed by the EU, America, Japan as well as other major economies is quite risky, negatively affecting European banks, so it needs to be changed. That’s what Valdis Dombrovskis, the EU financial services commissioner told on Thursday.

A body of banking supervisors from almost 30 countries, The Basel Committee set the year-end as the deadline in order to conclude an overhaul of currently existing banking rules, also dubbed Basel III. The given measure is expected to make the sector safer.

However, opponents, mostly in the EU and Japan, reckon the review goes too far because they fear it disproportionately steps up how much capital banks should hold against risk.

EU finance ministers consider this reform to be unable to drastically increase capital requirements for financial institutions.

European bankers as well as officials are afraid of these changes. It seems to them that the changes will put EU banks at a disadvantage against their American counterparts, as their huge loan portfolios would look more risky, and therefore would require more capital, than American banks. 

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