The Basel Committee of bank supervisors aims to deliver the new Basel IV rules on capital requirements by the end of this year, meeting in Chile on Nov. 28-29. These rules aim to complete the framework developed since the financial crisis of 2008-09, when taxpayers had to bail out under-capitalised lenders.
Ahead of the meeting in Chile, the European Parliament’s Economic and Monetary affairs Committee today adopted a resolution calling for a more risk-based approach to regulation, with the same rules being applied to the same risk. Many MEPs have expressed concern that overly restrictive one-size fits all rules could lead to big hikes in capital requirements, leading banks to restrict lending in Europe.
The Committee called on the BCBS to do more to reflect the specificities of different forms of financing, such as real estate lending, infrastructure financing, specialised lending.
Sylvie Goulard MEP, Co-ordinator for Liberal and Democrat group in the European Parliament on the Economic Affairs Committee said today after the vote:
“Europe wants to be open and to work with others, but there is no question that any higher capital requirements proposed by the BCBS will ultimately have a greater impact in Europe than in other parts of the world, above all on the financing of the economy. As Mario Draghi said in the plenary on Monday, we were just beginning to regain pre-crisis growth levels after eight years. There is therefore no need to undermine growth, or financing flowing into the real economy in any way.”
“The Basel Committee should avoid a “one size fits all” approach which would mean every standard has to be applied in the same way – as this would not be efficient or proportionate.”
Commenting on the importance of increased transparency and accountability with regard to the ongoing BCBS discussions and the role played by the European Commission, the European Central Bank and the European Banking Authority, Sylvie Goulard said:
“Decisions taken by the BCBS have a direct link with the European Union’s legislative co-decision procedure. The new Basel IV standards will have to be translated into EU law by the Council and the European Parliament, so it is important the Parliament is allowed to closely scrutinise ongoing negotiations. According to its statute, the BCBS does not possess any formal supranational authority. Its decisions do not have legal force.”
Here is the Link of the draft report adopted today.
