The EU's financial services chief has announced that the EU will delay the implementation of a key part of the global bank capital reforms by one year to January 2026, in order to ensure fair competition between EU banks and their US counterparts.
Countries around the world are implementing the final batch of rules for the global bank capital agreement known as Basel III, which was introduced after taxpayers were forced to bail out banks during the global financial crisis from 2007 to 2009.
EU financial services commissioner Mairead McGuinness stated that the US will clearly not be able to implement these rules by their self-imposed deadline of July 2025.
During a meeting, McGuinness said, "In practical terms, the likelihood of the US implementing the Basel standards is now very slim, and the earliest we can expect this is January 1, 2026."
She said, "This one-year delay will create a level playing field for those large European banks competing with other big global banks. It gives us time to observe the approach taken by other countries."
EU banks compete with banks from the US and other regions in providing market activities and related financial services to international companies.
The EU had originally planned to fully implement these reforms by January 2025, but will now delay the market risk coverage part in the trading book of banks, known as the Fundamental Review of the Trading Book (FRTB).
McGuinness said the remaining changes will be implemented as scheduled.
She added, "In the EU, we are firmly committed to our timetable to start implementing the majority of the Basel standards as of January 1, 2025."
