Editorial Board
Basel III Is Too Kind to Europe's Banks
The new standards for capital have been watered down to win over the EU.
Europe's bank regulators prefer to look on the bright side.
Photographer: Sean Gallup/Getty ImagesAfter years of talks, central banks and financial regulators have finally agreed on the Basel III rules for bank capital. That's a good thing, mostly. The deal improves the regulatory framework and will give banks greater clarity about what's required. It's also a timely reminder that international policy cooperation can work.
There's a catch, however: The new rules have been watered down. Since the financial crisis, the European Union has been less zealous than the U.S. about reform -- and the Basel committee has relaxed some of its proposals to get the EU on board.