Michel Barnier, the European Union’s financial services chief, said he would seek talks with U.S. authorities in a bid to prevent a planned rule for overseas-based banks from placing EU lenders at a competitive disadvantage.
Measures adopted by the U.S. Federal Reserve this week that would require the biggest foreign banks to hold more capital in the U.S risk leading to tit-for-tat measures and fragmenting markets, Barnier said at a conference today in Brussels.
“These U.S. measures are not a good signal,” Barnier said. “If we see unilateral measures in one direction there will be measures in the other direction. But I want to avoid that.”
Foreign banks with $50 billion of assets in the U.S. will have to meet the standard under a revised rule approved this week, which raised the threshold from $10 billion proposed in 2012. The new standards take effect in July 2016.
While there are signs of improvement compared with an earlier version of the rule, further steps are needed, Barnier said.
Coherence between EU, U.S. rules is “in everyone’s interest,” he said.
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