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France & Germany want lighter Basel III

Monday 23 January 2012 - by Andrew.Hickley@gfsnews.com

 French and German officials are reportedly set to call for the international Basel III rules to be watered down to prevent lending to the real economy being throttled.

The FT says that a joint paper from German finance minister Wolfgang Schäuble and French counterpart François Baroin will call for special privileges for banks that own insurance companies.

To be put forward on Monday, the draft proposals aim to support small and medium-sized firms by allowing them to set aside less capital against specific loans, it says, though it does not go into further detail.

The measures will come alongside a request for a three-year delay to the 2015 deadline for banks to publish their leverage ratios, which measure the balance between high-quality capital to overall assets. The request is likely to infuriate British regulators, who last year told their banks that they should disclose their ratios by 2013.

It is believed that the pair will push for the softer measures to be applied globally, ensuring Europe will not be put at a competitive advantages by watering down the measures.

The draft reportedly says: "European institutions should agree on achieving the EU financial market regulation agenda while taking due consideration of its impact on the financing of the real economy."


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