New global rules leave just 10 major EU banks strapped for capital, project says
VScapital shortfall noted at less than 27 billion euros
The Basel III directive also tackles climate change, with branches
FRANKFURT, October 22 (Reuters) – Only 10 Major European banks may need to raise capital following the rollout of new global rules and their shortfall could be less than € 27 billion ($ 31.43 billion), according to the draft regulations. European Union consulted by Reuters.
The impact would be far less than the 52.2 billion euros estimated by the European Banking Authority (EBA) last year, a sigh of relief for a sector plagued by low profits for a decade and still recovering from ‘a pandemic-induced recession. .
The draft Basel III directive from the European Commission, which transposes the last batch of Global rules to prevent a repeat of the 2008 financial crisis call for an increase in the minimum capital requirements of EU banks from 0.7% to 2.7% by 2015 and from 6.4% to 8.4% by 2030.
“According to the estimates provided by the EBA, this impact could lead a limited number of large EU banks (10 out of 99 banks in the test sample) to have to collectively raise … less than 27 billion euros” , the Commission said in a statement. the document.
The EBA said the banks in the test sample came from 17 EU countries and represented around 75% of total EU bank assets.
The banks had pushed for a more flexible interpretation of the “output floor”, which limits their discretion in setting their own capital requirement, but their wishes were not granted.
The European Parliament will have the final say on whether the rules are approved, but regulators have warned the bloc not to deviate from standards already agreed globally.
The directive, due to be published next week, also gives supervisors the power to impose requirements relating to climate risk and contains stricter rules for branches of foreign banks in the EU.
This gives additional legal backing to the European Central Bank, which has pressured banks to disclose and tackle climate change risks, such as weather risks and regulatory changes.
As for the foreign branches, which had assets of 510 billion euros at the end of last year and are concentrated in Belgium, France, Germany and Luxembourg, they will now be subject to a common approval procedure. .
They will also have to comply with capital, liquidity, governance and risk management requirements, the project says.
($ 1 = 0.8591 euro)
(Reporting by Huw Jones, written by Francesco Canepa in Frankfurt, edited by Alex Richardson)
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