Parliament should adapt the Basel Committee's latest regulatory standards to the specificities of the EU banking market, Othmar Karas (EPP, AT), who is leading EP work on the latest draft rules on bank capital requirements, told the Economic and Monetary Affairs Committee on Tuesday. However, other MEPs disputed this view, at the start of a process whereby Parliament and EU Member States will eventually translate the Basel standards into legislation.
"Although the room for manoeuvre has lessened since last year due to the evolving situation we should aim to change the Basel Committee position on some points", rapporteur Othmar Karas (EPP, AT) said in his opening statement, arguing that the design of European rules needed to factor in existing specificities around the EU.
By contrast, ECR spokesperson Vicky Ford (UK), cautioned against introducing unnecessary differences with the Basel III standards which, she said, could be interpreted as the EU developing a lighter system to the global standard.
For the Socialist group, Udo Bullman (DE) said that it was crucial to have laws on capital quality which would avoid any need for a second bailout of banks, but that the same laws would also need to leave banks in a position to provide credit to small businesses and keep the real economy going.
The Liberals' shadow rapporteur Sharon Bowles (UK) pointed to a number of specific elements in the Commission's proposals which required more attention, such as the issue of how to consider sovereign bonds, and also the need for some harmonisation of risk models. She also cautioned against considering counter-cyclical buffers as a 'silver bullet' solution to all problems and stressed the need to give more consideration to how the rules would interact with other legislation.
Philippe Lamberts (Greens/EFA, BE) agreed with the rapporteur that a "one size fits all" model for the global banking sector was not plausible and that tweaks were therefore necessary. He called for higher capital requirements than those agreed by the Basel Committee, and stressed the need to review leverage limits downwards, citing the current plight of the Dexia group as justification. Mr Lamberts also felt that the transition periods for introducing a number of the new requirements, some lasting until January 2019, were far too long, since "this is a race against time".
The draft report is expected to be presented late in January 2012; with a vote in the Economic and Monetary Affairs Committee expected for the end of April. After that, negotiations with the Member States will begin with a deal hoped to be reached by the Summer.
In the Chair: Sharon Bowles (ALDE, UK)