BRUSSELS (Reuters): An agreement on new global banking rules should wait until the new US administration has made its approach clearer, the chairman of European Union finance ministers said on Friday.
Disagreement between the EU and United States has halted for months’ efforts by the Basel Committee of global financial regulators, which oversees U.S., European and Japanese banks, to reform rules on capital requirements and loss-absorbing buffers.
A deadline to reach a deal by the end of last year was missed and no new target date has been proposed.
“It is not that we want to delay, but things are changing rapidly,” Maltese Finance Minister Edward Scicluna told reporters before a monthly meeting of EU finance ministers in Brussels which will discuss the state of the Basel negotiations.
Scicluna, whose country holds the rotating presidency of the EU until July, said it would be wrong to take a decision when things are unclear. Among the reasons for uncertainty, he cited the new U.S. administration of President Donald Trump, whose intentions on financial regulation are unclear.
He urged global regulators to reach an agreement only “once the dust settles”, to avoid being caught up with a wrong deal.
Europe and Japan oppose the reform prepared by the Basel Committee as they feel the review goes too far and increases disproportionately the capital banks must hold against risk. This would increase costs for European and Japanese banks, favouring their U.S. rivals that have already a set of rules similar to those proposed at Basel, EU officials have warned.