EU’s Barnier Seeking U.S. Swaps Deal Before DecemberJim Brunsden, Rebecca Christie and Ben Moshinsky
The European Union’s top financial-services official said he’s seeking a deal with U.S. regulators on rules for swaps clearinghouses before a Dec. 15 deadline for EU banks to face tougher capital rules.
The European Commission is working “very intensely” with the U.S. Commodity Futures Trading Commission to find an agreement “in the coming weeks,” Michel Barnier said in an interview in Milan yesterday.
“My intention is that we can get an agreement before Dec. 15,” Barnier later told reporters. Still, he said, it is legally possible to extend the deadline.
The European Commission and the CFTC have repeatedly clashed over the scope of their rules for the $710 trillion market for swaps and other over-the-counter derivatives, as regulators seek to plug loopholes exposed by the 2008 financial crisis.
In the EU, the Brussels-based commission is empowered to decide if another nation’s rules are up to scratch. These so-called equivalence decisions have implications for market access and other requirements. Firms based in countries that are judged equivalent can in some cases access the EU market without having to expressly comply with EU regulations, because their domestic rules are as strong.
Under EU bank rules, the commission is responsible for deciding whether other nation’s clearinghouses have standards that are as robust as those applied in the 28-nation bloc, with banks to face tougher capital requirements when dealing with platforms that don’t make the grade.
The EU earlier this year delayed a June 15 deadline for these rules to kick in, so as to allow more time for talks with the U.S.
Banks have urged regulators to find an accord, warning of damage to global markets if one isn’t reached before the deadline.
“We are now in near daily discussions with the CFTC and its Chairman Tim Massad on the details,” Barnier said in a speech at a conference yesterday in Milan, according to a copy of his prepared remarks.
“It takes two to tango,” he said. “The American side must also deliver.”
European Commission officials were in Washington for talks this week, and Barnier himself will “take stock” with Massad next week, he said.
“I will work until the last day,” said Barnier, who steps down at the end of October.