IMF Backs U.K. Bid to Exceed Basel Bank Rules in Clash With EU
The International Monetary Fund said the U.K. is right to seek the power to exceed minimum capital standards on banks endorsed by global regulators, siding with Britain in a clash with the European Union.
The U.K. authorities “are rightly advocating” for European legislation that “enables the establishment of strong standards that exceed the Basel III minima,” the IMF said in a report on the U.K. published in Washington today.
Michel Barnier, the EU’s financial-services commissioner, has clashed with some governments in the 27-nation EU over how to interpret and implement last year’s deal by the Basel Committee on Banking Supervision. Finance ministers including U.K. Chancellor of the Exchequer George Osborne, Spain’s Elena Salgado and Sweden’s Anders Borg have criticized plans to make it harder for national regulators to set tougher capital rules than the accord, known as Basel III.
Barnier last month proposed common rules to put in place Basel III in the EU, arguing that “core requirements” should be harmonized to avoid distortions to competition and regulatory arbitrage.
The proposals would still allow countries “necessary flexibility” to set tougher requirements on a case by case basis for banks considered to be more at risk, the commissioner said. EU governments and lawmakers at the European Parliament must approve draft legislation before it can take effect.
Chantal Hughes, a spokeswoman for the commission, didn’t immediately respond to a phone call seeking comment.
To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net
To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net
Rate this Page