EU set to delay Basel bank capital rules



Reuters

Published — Wednesday 12 December 2012

Last update 12 December 2012 3:29 am

| نسخة PDF Print News | A A

ROME/BRUSSELS: The European Union is set to delay introduction of new capital rules for banks by up to a year, the Bank of Italy said yesterday, which regulators fear could undermine one of the most important reforms of the financial crisis.
Many officials in Brussels had been expecting a delay following the recent US decision to abandon the January 2013 target and in light of difficulties between EU countries and the bloc's parliament in finalizing the rules.
"We are going towards a postponement of Basel III to the end of 2013, January 2014 at the latest," Bank of Italy Director General Fabrizio Saccomanni told a meeting of business leaders in Rome.
The delay deals a further blow to the global Basel III accord, which was struck by central bankers and regulators meeting in Basel, Switzerland, in a bid to make banks less risky.
The accord requires banks to set aside more capital to cover losses such as unpaid loans and had been due to start from Jan. 1, 2013.
Austria's banking supervisor said it also expected a delay, though only until the middle of next year.
"We assume that it will certainly happen in the course of 2013," Financial Market Authority co-head Helmut Ettl told reporters. "I think there are good chances that the whole thing can take effect from July 1."
In practical terms, supervisors and markets have put pressure on top banks to meet or even exceed Basel III's basic capital requirements well ahead of the phase-in period from January that was set by world leaders in 2010.
European Union countries and lawmakers from the 27-member bloc's parliament meet on Tuesday and Thursday in what is likely to be their final attempt this year to sign off a law.
"A deal to my satisfaction looks highly unlikely," said Sharon Bowles, the British lawmaker who chairs the parliament's economic and monetary affairs committee.
The dispute centers on matters such as a demand by the parliament for rules capping banker bonuses at the level of their salary to be written into the new bank-capital legislation, but it is by no means the only outstanding issue.
"For people to suggest that the Parliament is blocking it on remuneration is nonsense," Bowles told Reuters. "There are a trillion other things."
Her skepticism was echoed by Philippe Lamberts, a member of parliament also involved in the talks.
"Besides remuneration, there are many substantial points still open, which make it increasingly difficult to reach a political deal this year," he said.
The new regime lays down higher standards in determining what kind of assets a bank can use to meet these capital levels. For example, it sets a limit on the use of hybrid debt that banks previously relied on, but which failed to avert the crisis.
By standardizing EU capital rules, the law would also make it easier for the European Central Bank to supervise lenders, the first step toward a banking union, which is a cornerstone of closer fiscal integration in the euro single currency area.
But the European Union is struggling to agree on many aspects of the package, including what kinds of assets can be considered liquid, or available at short notice.
As well as a cap on bonuses, the European Parliament has asked for a fixed calendar to introduce a capital surcharge agreed globally for the world's biggest 28 banks and other measures to tighten the application of the capital rules.

What's happening around Saudi Arabia

KUWAIT: Kuwait has detained 26 people suspected of involvement in a suicide bombing on a Shiite mosque last month that killed 27 people, a local daily reported on Monday, quoting the public prosecutor.The June 26 attack by Daesh jolted Kuwait, raisin...
JEDDAH: A small fire broke out on the roof of the Grand Mosque on Monday morning, causing minor injuries to five people, including members of the Civil Defense, one security officer and three workers. The fire broke out at about 2 a.m. and covered an...
RIYADH: Mosques across the Kingdom will conduct midnight prayers (Qiyam Al-Layl) at 1.a.m beginning Tuesday to mark the beginning of the last 10 days of Ramadan.“The special prayers are conducted during the last 10 days of the holy month from 1 a.m.,...
JEDDAH: The director general of the Saudi Industrial Property Authority, Saleh Rasheed, has said that Sadeer Industrial City, which is regarded as one of the largest industrial cities in the Kingdom, possesses great capabilities that sets it apart as...
DAMMAM: Cheap and out of date cosmetics are causing serious health problems in the Kingdom, including skin diseases, hair loss and cancer, local doctors say.These products are often manufactured incorrectly or contain harmful fats, the doctors were q...
JEDDAH: Several young Saudis have started filming Jeddah’s historic district using cameras mounted on drones to gather professional 3D footage that can be used to build models and create virtual tours.Bandar Al-Mutlaq, owner of the Arab Foundation, w...
RIYADH: The Saudi capital is fully geared for this year’s Eid Al-Fitr celebrations that include an exciting bouquet of entertainment, heritage, sports, artistic and theatrical events.The annual Muslim festivities being organized here by the Riyadh mu...
JEDDAH: As part of its growing supervisory and investigative status, Riyadh Health Department’s forensics center examined 632 cases over the past eight months involving suspected murder, rape and abuse of women and children.Khaled bin Muhammad Hassan...
RIYADH: The Syrian Expatriates Medical Association (SEMA) expressed its thanks on Monday to Saudi organizations and individuals for donating to the campaign to help Syrians affected by the ongoing conflict.SEMA has 1,300 members in Syria and other co...
RIYADH: Inclusion of the Hail rock art in the UNESCO World Heritage List is proof of the Kingdom’s status and cultural profoundness, said the Saudi Commission for Tourism and National Heritage (SCTNH) on Monday.Reacting to the announcement of the fou...
JEDDAH: The Yemeni community has asked the Saudi government to extend the rectification process, which ends Tuesday, claiming that there are many thousands still seeking to get proper identification documents to qualify for work visas in the Kingdom....
JEDDAH: The Ministry of Municipal and Rural Affairs has set up 343 electoral constituencies for the Dec. 12 municipal council elections.This was done on the orders of Abdullatif Al-Sheikh, the minister and head of the General Committee for the Munici...
JEDDAH: Efforts are under way to electronically handle all Haj-related works to achieve speed and accuracy, as well as reduce costs an bring in transparency, Haj Minister Bandar Al-Hajjar has said.Speaking at a workshop in Jeddah on Sunday, Hajjar sa...
JEDDAH: The Board of Trustees of the King Abdullah International Foundation for Charity and Humanitarian Works on Sunday held its third meeting in Jeddah in the presence of Prince Khaled bin Abdullah, the board chairman, and Prince Miteb bin Abdullah...
RIYADH: The Ministry of Health has announced that six people were infected with the Middle East Respiratory Syndrome Coronavirus (MERS-CoV) in the period from June 28 to July 6.The ministry has now recorded 1,045 cases of MERS since June 2012, with 5...

Stay Connected

Facebook