Officials say US rules would increase minimum capital levels by double-digit percentage for biggest EU banks
The European Central Bank is debating whether to publish sensitive research showing capital requirements for big EU lenders would rise by a double-digit percentage if they had the same rules as large Wall Street rivals. Photograph: Justin Lane/EPAThe European Central Bank is debating whether to publish sensitive research showing capital requirements for big EU lenders would rise by a double-digit percentage if they had the same rules as large Wall Street rivals.
The so-called Basle III package is an ambitious overhaul of bank regulation agreed by supervisors around the world in the wake of the 2008 financial crisis to limit how much lenders can use their own models to make their balance sheets appear stronger than they would otherwise be.‘I laughed when a friend recommended I buy a single bitcoin when the price was €300.
The minimum capital levels for the biggest US banks include a buffer reflecting the Federal Reserve’s annual stress test results and a further surcharge based on their systemic importance, on top of the basic “pillar one” requirements of 4.5 per cent of a lender’s assets, weighted for risk. US banks are restricted in their use of such accounting moves. European banks also hold bigger “management buffers” above their minimum capital requirements than US peers.
Earlier this year, the Fed cut a proposed increase to capital requirements for the country’s largest banks by more than half to 9 per cent after a large backlash from the industry and politicians against the so-called “Basle Endgame” rules.
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