EU May Delay Basel Bank Rules

Deadline for tougher bank-capital rules may be pushed back by up to one year.

The European Union may push back the deadline for applying tougher Basel bank-capital rules for as long as a year after warnings from lenders that pressing ahead with the original timetable may drive up their costs, according to three people familiar with the talks.

EU lawmakers and officials, facing a Jan. 1 international deadline for incorporating the rules into law, held the latest in a series of meetings today on how the bloc should implement the Basel measures, said the people, who declined to be identified because the negotiations are private.

Representatives of Cyprus, which holds the rotating presidency of the EU, and legislators from the European Parliament, discussed whether the start date for applying the measures within the bloc could be delayed beyond the beginning of next year, said the people. Alternative dates being considered include July 1, 2013, or Jan. 1, 2014, one of the people said.

The EU has struggled to agree on how to apply the Basel rulebook for banks as legislators and officials spar over curbs on bonuses and how to ensure lenders can weather funding squeezes. The measures would more than triple the core capital that banks must hold as a buffer against insolvency.

The Group of 20 nations agreed in 2010 that the Basel rules should begin phasing in from Jan. 1, and should be fully applied by 2019.

This week the Basel Committee on Banking Supervision, the global standard-setting body that prepared the rules, admitted not all nations will meet the 2013 start date.

European banks have said the original start date is now “wholly unreasonable” given that the final details of the EU’s implementation of the measures is still unknown. Trying to prepare for rules that are still in flux could drive up their costs, the lenders said.

No decision on any delay was made at today’s meeting and further discussions will be held later this month, the people said.

 

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