EU and US regulators unable to agree on new measures
(25 November 2016 – Europe) According to a report in the Financial Times, the European Union (EU) is proposing to toughen capital and liquidity requirements for lenders’ subsidiaries in Europe, in a bit to make those business units safer and lessen negative impacts of their failure in the event of a crisis.
The proposals would make it more difficult for banks to shift capital their global business units, and more expensive to do business internationally.
It is similar to regulation put in place by the US in 2014, which raised capital requirements for European banks operating in America.
Meanwhile, central bankers and regulators on the Basel Committee on Banking Supervision are split on how to make banks safer in the future. European regulators are have voiced concerns over their US counterparts proposing rules that benefit their own banks at the expense of those in other regions.
Deutsche Bank CEO John Cryan publicly expressed these concerns this week, saying, “I think it’s about time that Europe started introducing rules that benefited Europe and didn’t play to some policy of global harmonisation that sounds good on paper but is not relevant to anything.”
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