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EU earns 'fail' grade over bank capital regime 

December 9, 2014
Benjamin Fox, EU Observer

New EU laws do not meet new global standards and would not be enough to ensure that the bloc's banks could survive a future financial crisis, according to a new report by the leading global bank regulator.

The rebuke is contained in a report published on Friday (5 December) by the Basel committee at the Swiss-based Bank for International Settlements, the body tasked with formulating the rules that govern the world's lenders.

The committee, which also assessed the US, Japan, China, Brazil, Canada and Australia, finding them all in compliance, found that the new EU framework complied with the Basel rules in only eight of the fourteen areas.

The EU is the first international body to be given a 'fail' verdict by the Swiss-based regulator.

The EU's new rules on "counterparty credit risk", which deal with derivatives, were found to be 'non compliant' by the committee, as were "the treatment of exposures to SMEs, corporates and sovereigns."

Read more: EU Observer

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