The members of the European Association of Co-operative Banks gladly take the opportunity to comment on the Commission consultation on the implementation in the EU of the final Basel III reforms with a view to the publication of the legislative proposal later this year.
The BCBS proposals will result in a massive capital increase for EU banks (+23.6% on aggregate according to the EBA), while the mandate of the G20 and the resolution of the European Parliament called to result “in no significant increase in overall capital requirements”. The results instead appear as massive increases in capital requirements in Europe across the board.
The members of the EACB believe that capital levels need to be reasonably set and any gold-plating has to be avoided in order to maintain a stable flow of capital to the real economy. Only a sensitive calibration of capital requirements would ensure a global level playing field with overseas competitors. Moreover, efforts are necessary to keep methodologies and processes sufficiently simple for smaller banks in order to avoid a disproportionate regulatory burden.