(Bloomberg) — Germany’s Bundesbank said Europe should delay new global capital requirements for banks’ trading businesses and could eventually consider permanent changes to them.
“It’s certainly sensible to wait until it’s clear what the US will do,” Bundesbank executive board member Michael Theurer said in a speech on Thursday in Frankfurt. That would provide time to “conduct a fact check” in the interest of preserving “the level playing field” between banks on either side of the Atlantic, he said.
The European Union is considering delaying or changing planned international rules known as the fundamental review of the trading book, amid uncertainty over whether and how the US will implement them under the Trump administration. Banks have been lobbying for a lighter regulatory burden to make them more competitive, and authorities are weighing how they can simplify the rules to support growth.
Potential concessions on the trading rules include alleviating data requirements, spacing out reports and other issues, Bloomberg reported previously.
Such “targeted” tweaks floated by the European Commission can simplify the approaches taken by banks and lower expenses for complying with the rules, Theurer said.
While these would be temporary, “at a later point, the commission could present a suggestion for a law that would continue the temporary measures or adjust and extend them,” Theurer said in the text of a speech he gave in Frankfurt.
He added that European bank supervisors agree that approvals for determining what banks hold in their trading books as well as oversight of the so-called standard approach need to be efficient. For smaller banks, European-wide processes will be applied in a “proportional” manner to keep costs as low as possible, he said.
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