The European Commission is set to postpone by three years the rollout of a new market risk capital regime for banks, reported Reuters, as it waits to see how the US and Britain apply the same global standards.
The measures sit within the Fundamental Review of the Trading Book, or FRTB, and the wider Basel III framework, which are designed to improve how banks assess trading-related risks and to ensure capital levels match those exposures more closely.
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The decision to hold back the trading risk capital rules is aimed at preventing EU banks from being placed at a disadvantage relative to rivals in the US and Britain before the approach taken in those jurisdictions becomes clearer.
“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 existing EU law, the rules would otherwise have taken full effect from January 2027.
The Commission’s revised arrangement, unless blocked within the next six months by either EU governments or the European Parliament, will remain in place from 2027 until the end of 2029.
Officials said the three-year postponement was agreed with the European Central Bank and the European Banking Authority.
