EU Weighs Response to Basel Liquidity Rule Deal, Officials Say

European Union officials are weighing how to adapt the bloc’s laws to international bank-liquidity rules agreed on by regulators earlier this month, according to two people familiar with the discussions.

Diplomats from the EU’s 27 nations met today to discuss the Jan. 6 deal reached by the Basel Committee on Banking Supervision, according to the people, who couldn’t be named because the talks are private.

The EU must assess how the accord affects two draft laws that the bloc is working on to apply Basel standards in the 27-nation EU, the people said.

The Basel deal concerned a so-called liquidity coverage ratio that will force banks to hold enough easy-to-sell assets to survive a 30-day credit squeeze. Regulators in Basel agreed to water down the measure compared to a draft version published in 2010, and to delay its full entry into force.

The draft version was published as part of an international overhaul of bank regulation, known as Basel III, that the EU is in the process of implementing.

Provisional versions of the EU’s implementing laws have said that the bloc should apply an LCR that is comparable with the Basel standard.

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