European banks have urged the European Commission (EU) to delay the implementation and application of Basel III, the global banking capital rules, by a year to 2014.
A letter sent by the European Banking Federation (EBF) on 21 November to the EU Internal Market commissioner Michel Barnier was quoted by Reuters as saying, the EBF has requested to hold up the launch of new rules, so that the EU banks can ready themselves to vie with their US equivalents.
"We are now very troubled over the possible repercussions that the most recent statement from the US Authorities may have for the international competitiveness of Europe’s banks."
This appeal comes at a time when the US authorities have postponed implementation of the new banking capital rule, designed to safeguard banks and financial institutions from going bankrupt during financial crisis.
The new set of rules will compel the banks to shore up their capital by three times when compared to basic requirements they usually hold, in a move to avoid future bailouts.