What Global Bank Regulators Are Fighting About: QuickTake Q&A
The twin tower skyscraper headquarter offices of Deutsche Bank AG, center, stand at dusk in Frankfurt, Germany, on Monday, July 25, 2016. Deutsche Bank Chief Executive Officer John Cryan will try to convince investors this week that his efforts to turn around Europe's biggest securities firm will succeed.
Photographer: Martin Leissl/BloombergRarely have the people who look after the global banking system argued so stridently or so publicly among themselves. The members of the Basel Committee on Banking Supervision are struggling to complete an overhaul of capital standards intended to strengthen the world’s biggest lenders. A compromise deal remains elusive, and talks have stalled during the change of administration in the U.S. The most vocal demands have come from Europe, where policy makers want to shield already struggling banks from even stricter regulations.
The Basel Committee is revamping the way banks calculate the risk of their assets and the capital they need to cover that risk. European Union banks including Germany’s Deutsche Bank AG and France’s Credit Agricole SA have lobbied hard against the plan, warning that it could saddle them with hundreds of billions of dollars in additional capital charges. Top EU policy makers have joined the fight, arguing that significantly higher capital requirements would impede lending and hit European banks harder than their U.S. peers.