Refinements to upcoming Basel III regulations must be the subject of deep analysis and scrutiny according to chiefs of the European Commission (EC) and Council.
In a statement, published in advance of September’s G20 summit in Hangzhou, EC president Jean-Claude Juncker and European Council head president Donald Tusk laid out the EC’s viewpoint on upcoming Basel III regulation.
“The intended refinements of the Basel III framework need to be subject to a thorough impact analysis and capital requirements must not be significantly increased in any of the major regions of the world.”
“The work of the Basel Committee, which has our support, should conclude by the end of 2016 to ensure regulatory certainty. “
Increased capital requirements and leverage ratio requirements laid out under Basel III regulations are predicted to have an increased impact on low-margin, high-volume business in highly rated securities, for example repo trading.
The pair also prioritised resolution on central counterparties and over the counter derivatives.
“On central counterparties we now need to push forward on the resolution framework and the finalisation of the over-the-counter derivatives reforms remain priorities.”