NBB wants capital requirements for European banks to comply with Basel III

In the autumn, the European Commission will publish a proposal for updated capital requirements for banks in the EU. This update is the final piece in the fundamental reform of banking regulation that was agreed upon at a global level after the financial crisis of 2008 and is known as the Basel III standards. 

The NBB, as well as a large number of other national central banks and supervisory authorities in the EU, call on the European Commission to respect the letter and spirit of this global agreement.

More specifically, the signatories insist that the internationally agreed minimum threshold for bank capital requirements (the so-called "output floor") follows the international agreement both for banking groups and their local subsidiaries and that the EU does not introduce additional EU-specific deviations in the regulatory framework that would make the requirements less stringent for European banks.

Deviating from the Basel III agreement could have a negative impact on confidence in both the European banking sector and the EU regulatory framework. This in turn risks having a negative impact on financial stability and on the economy. It is therefore important that the international agreements are fully, timely and consistently implemented.