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EU Banks Get Three-Year Reprieve on Market Risk Rules
5 Jun
Summary
- EU Commission postpones new market risk capital rules by three years.
- Postponement aims to align with US and UK approaches to global standards.
- New rules now expected to be in effect from 2027 to 2029.
The European Commission is planning a three-year delay for the implementation of new market risk capital rules affecting banks. This strategic postponement is intended to allow the EU to observe how the United States and the United Kingdom apply global standards before finalizing its own approach.
The measures are part of the Fundamental Review of the Trading Book (FRTB) and the broader Basel III framework, designed to enhance how banks assess trading risks and maintain adequate capital levels. By deferring these rules, the EU seeks to prevent its financial institutions from facing a competitive disadvantage.
Originally scheduled to take full effect in January 2027, the new arrangement, if approved by EU governments and the European Parliament, will be implemented from 2027 through 2029. This decision has been reached in coordination with the European Central Bank and the European Banking Authority.
EU Commissioner for Financial Services, Maria Luis Albuquerque, emphasized the importance of a level playing field, stating that these measures provide necessary time to monitor international developments. The aim is to maintain global financial market competitiveness while adhering to Basel standards.
