ESBG favours universal implementation of Capital Adequacy Directive

06 May 2003

The European Savings Banks Group (ESBG) believes that the proposed new Capital Adequacy Directive should be applied on a universal, positive basis, rather than on a voluntary one. The ESBG has identified five major reasons why a voluntary implementation method would be inappropriate in the European context.

The ESBG believes that:

The universal implementation of the Directive in Europe is consistent with the aims of the European single market and monetary union;

The revised Accord and the provisions for a new Directive allow for the size and level of risk assumed by the financial institution;

The voluntary implementation approach could potentially lead to the concentration of riskier exposures in the ‘Basel I’ sector;

The aims of the Directive in terms of regulatory arbitrage are as applicable to large as to small banks;

The voluntary implementation of the Accord would be detrimental to the strategic interests of European banks in the future development of regulatory provisions.

Press release
Position Paper

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