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The European Central Bank is debating whether to publish sensitive research showing capital requirements for big EU lenders would rise by a double-digit percentage if they had the same rules as large Wall Street rivals.
Some senior policymakers at the ECB are pushing for it to publish the report, or at least some of its findings, to counter heavy lobbying by the banking sector to water down rules implementing the Basel agreement on global capital requirements in the sector. The pressure from EU banks is likely to increase if the US dilutes or even abandons plans to impose the Basel rules on its banks amid an expected wave of deregulation following Donald Trump’s victory in this month’s presidential election.
The so-called Basel III package is an ambitious overhaul of bank regulation agreed by supervisors around the world in the wake of the 2008 financial crisis to limit how much lenders can use their own models to make their balance sheets appear stronger than they would otherwise be. T
he ECB report, which was completed last year but has never been published, examined what would happen to EU bank capital requirements if they were subjected to current US prudential rules. Officials in Frankfurt found that for the biggest EU banks, the application of US rules would increase their minimum capital levels by a double-digit percentage, according to two people briefed on the report. The biggest lenders in the EU and the US have to meet extra capital requirements based on their systemic importance, and the impact their collapse would potentially have for global finance....
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