A document drafted by the European Commission and seen by Reuters suggested that EU banks should have leeway over the Basel Committee’s 2019 start date, instead adopting a phased implementation.
Basel proposals intend to force banks to hold higher capital for what is deemed as riskier lending, which is expected to damage lending to first-time buyers and deal a further blow to the buy-to-let market.
Banks are said to already be struggling to produce suitable returns amid tougher capital requirements brought about by the Prudential Regulation Authority (PRA) alongside a rock-bottom interest rate environment.
At a speech given by the PRA’s CEO Sam Woods this week, he admitted that “developing sustainable business models remains a major challenge for many banks”.
