The law, held up amid clashes on banker bonuses, leverage limits and liquidity ratios, should take effect "as soon as possible in 2013", Barnier said in prepared remarks for a meeting of finance ministers in Brussels.
Negotiators at talks on December 11 and December 13 should be given “enough latitude” to “rapidly reach a compromise solution”, Barnier said. As part of an agreement, ministers should back calls from the European Parliament for binding limits on the size of banker bonuses compared to their fixed pay, he said.
EU governments and members of the assembly have struggled to agree on how the bloc should apply the international rules, which were agreed on by the Basel Committee on Banking Supervision. The standards more than triple the core capital that lenders must hold to absorb losses, and were drawn up in response to the turmoil that followed the collapse of Lehman Brothers Holdings Inc. The so-called Basel III measures are scheduled to phase in from January 1 2013, to 2019. Even with a political deal next week, the EU is destined to join the US in missing January’s global deadline to implement Basel III, Barnier’s spokesman said yesterday.
Barnier warned ministers against seeking too much leeway to set tougher capital rules for their banks than foreseen in the draft EU law. This push for flexibility, which has been made by nations including the UK and Sweden, raises “very serious legal problems”, he said.
A final deal on the rules will probably give the European Banking Authority “solid” powers to police which kinds of securities banks can count toward their core capital, Barnier said.
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