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Global Bank Regulator Holds Line Against Europe on Capital Rules 

October 10, 2016

Boris Groendahl, Bloomberg

Global banking regulators are sticking to their guns on capital standards in the face of intense European pressure to soften planned rule-changes.

The Basel Committee on Banking Supervision will wrap up work on the post-crisis capital framework on schedule by the end of the year, William Coen, the regulator’s secretary general, said on Friday. Key elements criticized by European Union policy makers will be retained, according to the text of Coen’s remarks in Washington.

One flashpoint is a proposed new capital floor that caps the benefit banks can gain by measuring asset risk using their own models compared with a formula set by regulators. Coen said “discussions are still under way” on the floor, though Valdis Dombrovskis, the EU’s financial-services chief, called last month for it to be scrapped.

The Basel Committee has made “substantial progress” toward completing the rules known as Basel III, taking into account industry responses to the proposals and its own impact studies, Coen said. “Based on these inputs, the committee will produce a final package that reduces variability in risk-weighted assets and helps restore credibility to banks’ risk-based capital ratios,” he said. Read more

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