EU Targets 2014 Deadline for Basel Implementation, Lawmaker Says

The European Union plans a Jan. 1, 2014 deadline for legally implementing Basel bank capital rules, on concerns that national parliaments must be given enough time to adopt the overhaul, according to Othmar Karas, the lead EU legislator working on the standards.

The 2014 date, which is a year later than a deadline set by global regulators for the requirements to be written into nations’ banking rulebooks, will give the bloc, “the time that we need technically to implement the measures,” Karas, an Austrian lawmaker in the European Parliament, said in a telephone interview on Dec. 13.

The step “won’t prevent measures being introduced earlier,” Karas said. “It’s not a delay, it’s not a reaction to the U.S.”

American regulators said in November that they wouldn’t meet the international Jan. 1, 2013 deadline to begin phasing in the rules, known as Basel III, as they wanted to take more time to consider responses from banks.

Members of the EU parliament and officials are seeking to thrash out a political accord next week on how to implement the standards, which more than triple the core-capital lenders have to hold against possible losses.

Karas said he’s confident that the EU can broker a political deal on implementing Basel III at a negotiation meeting on Dec. 18. The 2014 date would give national parliaments time to pass local laws enacting the expected EU- level accord on how Basel III should be implemented, he said.

Global regulators agreed in 2010, when Basel III was published, that the standards should be gradually imposed on banks, and be in full force by 2019.

National supervisors from EU countries and the European Banking Authority have already taken some steps to anticipate Basel III, including a decision by the EBA to force large, systemic banks to hold core capital equivalent to 9 percent of their risk-weighted assets.

To contact the reporter on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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