- BRUSSELS: European banks claim that new global rules forcing them to put aside more capital could force them to increase lending costs to eurozone households and businesses by nearly 1 percent on average.
The European Banking Federation says its Thursday analysis of the proposed new Basel 3 banking standards would limit banks' credit growth and profits, hurt the economy and prevent the creation of up to 5 million jobs in the region.
The banks are warning that too high capital requirements — intended to counter risks in the wake of the bruising financial crisis — could force them to hold back lending.
European companies rely far more on banks for finance than American companies which depend more on bonds.