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Guersent: EU undermined in Basel

Thursday 6 October 2011 - by Andrew Hickley at the GFS conference in Brussels

Europe must act in a more collective spirit within the influential Basel Committee on Banking Supervision to ensure it is not undermined by new capital and liquidity rules, a senior member of the European Commission has claimed.

At a conference in Brussels hosted by Global Financial Strategy, Olivier Guersent, the head of internal market commissioner Michel Barnier's cabinet, took a swipe at nations in the BCBS that had helped to draft the Basel II and Basel 2.5 accords, only to then not adopt the changes.

"When we go to the Basel committee, maybe for once we could have a common European view and stop [having] rules imposed by people that are in the minority in the committee and that at the end of the day do not apply them," he told the audience on Wednesday.

"That would be a change, and that might be a good idea."

He also said that the commission is intending for national banking supervisors to engage with the European Banking Authority on liquidity proposals.


While supervisors may disagree on certain aspects, they must decide on a joint list of assets that should be part of the final liquidity arrangements that the Basel committee puts forward, he said.

Under the Basel III agreement, the Basel committee has put forward both short-term and long-term liquidity requirements which will be phased in from 2015 and 2018 respectively.

These are subject to an observational period that will allow the committee to assess if any unintended consequences will stem from the liquidity requirements, allowing them to make changes before banks must adhere to the measures.

The banking industry has previously hit out at the proposed standards, which they say place too much of an emphasis on holding sovereign debt.

Send us your thoughts (in strict confidence) or submit an article in response:
Email: andrew.hickley@gfsnews.com


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