Skip to content

Europe Scales Back New Bank Capital Proposal to Boost Recovery

  • EU will give banks more flexibility according to latest draft
  • Proposal to be released Wednesday by European Commission
City Workers Return to Office in French Capital
Photographer: Nathan Laine/Bloomberg

The European Union plans to soften the blow to banks from new capital rules, arguing that an easier stance ensures lenders can keep funding the economy as it recovers from the shock of the pandemic.

In its implementation of the global banking standards known as Basel III, the European Commission will include flexibility on several issues banks had lobbied for while stopping short of meeting the industry’s key demand of retaining significant freedom to assess the riskiness of their own loans, according to a draft proposal seen by Bloomberg. On average, banks will see their capital requirements rise by less than previous predictions.