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A rift has opened between EU finance ministers over planned international bank rules that some European capitals see as an attack on the competitiveness of their financial sectors.
The European Commission and nations including France have mounted a public campaign against new standards being developed by global regulators in the Basel Committee on Banking Supervision. They warn that the planned measures would lead to a significant increase in capital requirements at a time when banks are already feeling the strain.
Those warnings were repeated by a meeting of ministers in Luxembourg on Tuesday but were countered by Jeroen Dijsselbloem, the Dutch finance minister and president of the Eurogroup, who said that Europe should refrain from making ultimatums to Basel or pushing upfront demands aimed at capping the impact of the new rules.
“We’ve had this discussion … before where a number of ministers say, ‘look, whatever happens in Basel it cannot lead to higher capital requirements’, and I said then and now that I don’t think that is the right starting point,” Mr Dijsselbloem said. “I think the approach should be different.”
Europe has waged an unusually public campaign against the latest round of negotiations in the Basel committee, a 40-year old institution in which officials from 27 countries meet to thrash out technical agreements on banking standards. The group maintains a high level of secrecy, and splits are usually resolved through repeated redrafting of complex regulatory texts.
Last month, Valdis Dombrovskis, the EU’s financial regulation commissioner, warned that he was prepared to reject the new Basel standards if they placed an excessive burden on Europe’s banks.
Brussels would not accept any reforms that “lead to a significant increase in the overall capital requirements shouldered by Europe’s banking sector” or put “our banks at a disadvantage compared to our global competitors”, he said. “We want a solution that works for Europe.”
His stance has been echoed strongly by France and Germany, all of which are represented at the Basel table.
Michel Sapin, France’s finance minister, warned this week: “It is pointless, and even dangerous, to keep adding layer upon layer [of capital requirements], to want to put still more obligations on banks, especially European banks.”
But Mr Dijsselbloem cautioned against bellicose rhetoric towards the committee.
“Basel is to me a valuable platform,” he said. “I think we should use Basel to have solid international standards.”
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