Regulators say EU to delay Basel bank capital rules

Tue Dec 11, 2012 8:07am EST
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By Alberto Sisto and John O'Donnell

ROME/BRUSSELS (Reuters) - The European Union is set to delay introduction of new capital rules for banks by up to a year, the Bank of Italy said on Tuesday, which regulators fear could undermine one of the most important reforms of the financial crisis.

Many officials in Brussels had been expecting a delay following the recent U.S. decision to abandon the January 2013 target and in light of difficulties between EU countries and the bloc's parliament in finalizing the rules.

"We are going towards a postponement of Basel III to the end of 2013, January 2014 at the latest," Bank of Italy Director General Fabrizio Saccomanni told a meeting of business leaders in Rome.

The delay deals a further blow to the global Basel III accord, which was struck by central bankers and regulators meeting in Basel, Switzerland, in a bid to make banks less risky.

The accord requires banks to set aside more capital to cover losses such as unpaid loans and had been due to start from January 1, 2013.

Austria's banking supervisor said it also expected a delay, though only until the middle of next year.

"We assume that it will certainly happen in the course of 2013," Financial Market Authority co-head Helmut Ettl told reporters. "I think there are good chances that the whole thing can take effect from July 1."

In practical terms, supervisors and markets have put pressure on top banks to meet or even exceed Basel III's basic capital requirements well ahead of the phase-in period from January that was set by world leaders in 2010.   Continued...

Bank of Italy deputy governor Fabrizio Saccomanni gestures during a meeting with the foreign press in Rome February 9, 2012. REUTERS/Alessandro Bianchi