US, EU contrasting adaptations of Basel III should be examined, global authority says

16 May 2019 6:46pm
Global authorities should review the US and EU’s differing approaches to adapting Basel III requirements to size and risk differences among banks, said Fernando Restoy, head of a Bank for International Settlements unit.

The US is subjecting just over a dozen banks with at least $250 billion in assets to Basel’s capital and leverage requirements, he noted at a policy implementation meeting.* The EU, on the other hand, is requiring nearly all institutions, regardless of size, to adhere to these standards.

“These vastly different approaches, while well within each jurisdiction’s purview, illustrates the need to achieve a common understanding of the pros and cons of the varied proportionality approaches,” said Restoy, chairman of Basel-based Financial Stability Institute.