EU Escalates Standoff With U.S. on Global Bank Capital Rules
- 28-nation bloc objects to capital floors in risk measurement
- Official says Basel overhaul shouldn’t boost EU banks’ burden
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The European Union upped the ante in its battle with the U.S. over changes to global bank-capital rules, calling for a key plank of the reforms to be scrapped.
The EU, home to nearly half of the world’s biggest banks, opposes the introduction of capital floors, a restriction on firms’ use of their own statistical models to measure asset risk that would drive up their capital requirements, an EU official said. The U.S., by contrast, has said regulators should consider discarding the internal-model approach altogether because it creates the potential for banks to game the rules.