BRUSSELS, June 4 (Reuters) – The European Commission will delay the introduction of a new market risk capital framework for banks for three years to see how the U.S. and Britain implement the same international standards, it said on Thursday.
The framework is part of the Fundamental Review of the Trading Book (FRTB) and the global Basel III banking standards that are to strengthen risk measurement in banks’ trading and make sure their capital accurately reflects the risks they take.
Pushing back the implementation of the capital requirement rules related to trading risk is meant to avoid putting European banks at a disadvantage to peers in the U.S. and Britain until it is clear how the two jurisdictions will proceed.
“Europe’s banks must be able to compete on equal terms with their international peers,” EU Commissioner for Financial Services Maria Luis Albuquerque said.
“These targeted and time-limited measures help preserve a level playing field in global financial markets while maintaining our commitment to the Basel standards.”
“They… give us the necessary time to monitor developments in other major jurisdictions before determining the most appropriate long-term approach,” she said.
Under EU law, the new capital requirement rules would have otherwise applied in full from January 2027. The Commission’s new regime, unless vetoed over the next six months by either EU governments or the European Parliament, will run from 2027 to the end of 2029.
The three-year delay has been agreed with the European Central Bank and the European Banking Authority, officials said.
(Reporting by Jan Strupczewski; Editing by Jan Harvey)
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