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French central bank governor criticizes US for delaying Basel III implementation too long.

TraderKnows
TraderKnows
05-29

Recently, François Villeroy de Galhau, the Governor of the Bank of France, publicly criticized the United States for failing to implement the Basel III regulations in a timely manner.

François Villeroy de Galhau, Governor of the Bank of France and ECB policymaker, stated on Wednesday that the EU "could and should" delay the implementation of certain bank capital rules if the U.S. takes too long to fully adopt the Basel III rules.

French President Emmanuel Macron and other French officials have long complained that U.S. banks' failure to apply post-financial crisis Basel III capital rules puts their European competitors at a disadvantage.

Villeroy, the Governor of the Bank of France, mentioned that U.S. regulators have recently promised to "fully and faithfully" implement the Basel III international minimum bank capital rules.

Villeroy said, "If, unfortunately, the delays and/or differences are too substantial, Europe could and should... delay the implementation of certain provisions, particularly those concerning market risk."

Villeroy made these remarks at a press conference for ACPR, the French financial regulatory authority, of which he is also the head.

Last December, the EU passed a set of banking regulations allowing for delays, even though it is not the optimal choice, Villeroy stated.

The Basel III rules will apply to banks with assets exceeding $100 billion, fundamentally changing how the largest banks manage their capital and creating a ripple effect on their lending and trading activities.

Last month, Macron called for a reassessment of how the EU applies these rules, stating, "We cannot be the only economic area in the world applying them."

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Basel III

Basel III is an international financial regulatory framework designed to enhance the financial stability and risk management capabilities of the banking sector.

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