ECB’s Villeroy calls for EU bank rule delay over US Basel III lag

The European Union “could and should” delay the implementation of certain bank capital rules if the US takes too long to fully implement the Basel III rules, ECB policymaker Francois Villeroy de Galhau said on Wednesday, as reported by Reuters.

Villeroy, who heads the French central bank, highlighted concerns that US banks’ failure to apply Basel III rules puts European banks at a competitive disadvantage.

Villeroy stated that US regulators have recently committed to fully implementing Basel III rules. However, if significant delays or differences persist, Europe could postpone or adjust certain provisions, particularly those related to market risks.

The EU has the flexibility to delay implementation, as outlined in a package of bank regulations adopted in December.

Basel III rules, designed for banks with assets over $100 billion, aim to reform how major banks manage their capital, impacting their lending and trading activities. French President Emmanuel Macron has urged a revision of how the EU applies these rules, emphasising the need for global alignment in their implementation.