EU finance chief calls for compromise on bank capital | Investment News

LONDON (Reuters) – European Union financial services chief Mairead McGuinness on Tuesday urged lawmakers in the bloc to agree on bank capital rules to keep the sector resilient as it emerges from pandemic and markets are fragmenting due to the war in Ukraine.

EU approves law to implement capital requirements agreed in the Basel Global Committee of Banking Regulators, but intends to deviate from some of the Basel standards for real estate exposures residential and non-rated businesses.

The European Central Bank, which regulates major eurozone lenders, opposed the deviations, but McGuinness said they would be temporary to give banks time to raise capital levels, if needed, before they do not fully comply.

“Some say temporary derogations shouldn’t be or be permanent, and whether we can find a compromise, I’m not so sure,” she told the European Parliament, which has its say with EU states on the bill.

“We have to find a compromise to show that the European banking system is solid and ready for the future. We do not hesitate to implement it, but we give our banks time to adapt and I think it It’s totally legit,” McGuinness said.

She also urged the Parliament’s Economic Affairs Committee to reach an agreement with EU states before the end of June on its bill to regulate crypto markets.

Falling crypto prices and problems with crypto companies like Celsius Network show the need for rules to protect consumers and keep markets stable, McGuinness said.

The EU is also split on its proposal to ban payment for order flow, or wholesale market makers paying brokers for stock orders, a step the US is also considering.

A member of the committee urged McGuinness to go further and ban incentives in financial markets generally.

“When I listen to stakeholders, a lot of them would say don’t ban incentives and maybe the issue is around visibility and transparency. I’m sure the status quo is not the how we should proceed,” McGuinness said.

(Reporting by Huw Jones; Editing by Jason Neely)

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