Banking regulators from across the world meet in Sweden in a fresh bid to get agreement on completing Basel III, a set of tougher capital requirements initiated in the aftermath of the 2007-09 financial crisis.
But no final deal is likely given that France, backed by Germany and the Netherlands, is unhappy with the package on the table, which aims to ensure that banks are consistent in how they measure risks from loans to determine capital buffers, bankers and other sources said.
The main stumbling block is a proposed "floor" which would mean capital cannot fall below 75 percent of the "standard" approach set out by regulators and used by most lenders, while big banks use models to add up risks instead.
"Some are unhappy about the 75 percent because it is too high, some don't like it because it is too low, but everyone has signalled a willingness to agree on a certain number," the person said.
While European banks fear they will have to find significant amounts of extra capital under what they dub Basel IV, the United States does not want the floor set too low.
A Paris-based banking executive said he wanted to ask French President Emmanuel Macron for a global moratorium on new capital rules at the G20 level, although bankers also fear that France could end up being isolated.
The hope is that enough progress is made this week for it to be referred for the second time this year to Basel's oversight body to broker a final deal before momentum runs out.
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© Reuters
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