BASEL: The European Union\u2019s (EU) top financial services official has downplayed the prospect of completely axing a contentious bank capital rule slated for review, hinting instead at more temporary changes to address the immediate needs of Europe\u2019s economy.\u00a0<\/p>\n
One of the biggest surprises from the European Commission\u2019s grand plan for tackling banking competitiveness was a commitment to advance \u201cclear proposals\u201d to reform the \u201coutput floor\u201d, a new global rule introduced so banks couldn\u2019t game their models to cut capital charges.\u00a0<\/p>\n
The United States announced in March that it will not implement the output floor when it finally adopts the rules agreed in Basel almost a decade ago, while the EU had promised to introduce it on a phased basis despite protests from its banks.\u00a0<\/p>\n
In an interview after unveiling last Friday\u2019s report, financial services commissioner Maria Luis Albuquerque said the output floor is particularly onerous for European lenders because so many of the region\u2019s businesses don\u2019t have credit ratings and rely on bank financing.\u00a0<\/p>\n
Europe is trying to \u201cincentivise\u201d companies to reduce their dependence on bank lending, Albuquerque said.<\/p>\n
The work on the output floor will seek to \u201cbalance the short-term needs\u201d of Europe\u2019s economy, which are hurt by the output floor, \u201cwith a more strategic perspective\u201d toward reducing bank funding.<\/p>\n
The European Central Bank\u2019s supervisory arm, which oversees eurozone lenders, supports the output floor and Albuquerque said officials would \u201cneed to have a proper dialogue with them\u201d on the topic, as well as with those at the Basel Committee on Banking Supervision that set the rules. \u00a0<\/p>\n
\u201cIt\u2019s not Europe is doing something and everybody else is faithfully implementing Basel,\u201d Albuquerque said on whether tweaking the rules could compromise Europe\u2019s standing globally. \u2014 Bloomberg<\/p>\n","protected":false},"excerpt":{"rendered":"BASEL: The European Union\u2019s (EU) top financial services official has downplayed the prospect of completely axing a contentious…\n","protected":false},"author":2,"featured_media":594254,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[174],"tags":[251750,251753,8139,251751,79,179,18,17785,251752,5766,2219,19,17,106695],"class_list":["post-594253","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-bank-capital-rule","tag-bank-financing","tag-banking","tag-basel-rules","tag-business","tag-economy","tag-eire","tag-european-central-bank","tag-european-lenders","tag-european-commission","tag-european-union","tag-ie","tag-ireland","tag-maria-luis-albuquerque"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116949469292990325","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/594253","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=594253"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/594253\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/594254"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=594253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=594253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=594253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}