Europe’s biggest banks want financial regulators to pause before imposing new capital requirements that they argue could hurt lenders’ ability to help the economy grow.
The Association for Financial Markets in Europe, a trade group representing dozens of banks, investors and brokerages including Barclays Plc and Societe Generale SA, asked the European Commission to conduct an estimate of the impact of looming global capital rules on the EU economy. The group asked Jonathan Hill, the EU financial-services chief, to use the results of such a study to possibly push for changes in rules set by the Basel Committee on Banking Supervision.
“We need to make sure Europe’s regulatory framework is efficient and fit for purpose,” Simon Lewis, chief executive of AFME, said in a statement on Friday.
The letter was sent in response to the European Commission’s request for public feedback on the effect of wide-ranging financial regulations put in place after the 2008 financial crisis. The commission, which has made promoting jobs and economic growth a top priority, announced a review last year of the regulatory framework and said it plans to use the responses to determines if changes are necessary.
In the letter, AFME asked the commission to reconsider the need for legislation in Europe that could separate banks’ retail operations from riskier investment banking arms. Bankers and some European Parliament lawmakers have asked Hill to withdraw the legislation. In an interview, Hill said he had no plans to do so.
AFME also requested a series of specific changes in financial regulations, including how much capital banks must have to offset the risk in derivatives that are settled at central clearinghouses. The association said collateral that is posted to banks by their clients in cleared derivatives deals should be recognized as reducing risk to the financial system.