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EU banks to get more time to implement Basel capital rules

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  • 27/10/2016
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EU banks to get more time to implement Basel capital rules
The European Union is proposing that banks in the single bloc be allowed longer to introduce new rules requiring firms to hold a capital buffer against riskier lending, according to a report.

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”.

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