Banks within the European Union (EU) now have an additional year, until 1 January 2026, to comply with new Basel III capital adequacy requirements designed to prevent losses from economic shocks.
The extension is meant to align the EU with the United States, where the implementation of these global rules is not expected before the revised date, European Commissioner Mairead McGuinness said at a joint conference with the European Central Bank (ECB).
The EU is sticking firmly to the 1 January 2025 deadline for the primary Basel standards implementation, the Irish politician said. However, regarding market risk, it needs to ensure globally fair competition and alignment with the rule’s effective date, she added.
The Basel III reforms were developed following the 2008 financial crisis. They compel international banks to have additional liquidity reserves to counter current challenges, thus enhancing their resilience.
Several investment banks in Europe had called for the delay, highlighting competitive disadvantages against US and British banks.
The rest of the package remains unchanged.
