COVID hitting timing of Basel bank capital rules

Countries are facing challenges in rolling out final elements of tougher global bank capital rules. A senior Bank of England official said that this may need to coordinate on timing. The rollout of the rules known as Basel III began after the global financial crisis. This had highlighted how banks were holding too little capital by forcing taxpayers to bail many of them out.

In Europe, banks have been lobbying to ease the rules. This is by saying that they need to focus on helping economies recover from COVID 19. BoE executive director for prudential supervision Victoria Saporta told an event held by the Institute of International Finance, said that they should get on and do it and not wait for anything. Central bankers and banking regulators from the European Union called on the bloc. This is to implement the remaining Basel rules in full and on time. The rules have already been delayed a year due to COVID.

Saporta said that the BoE is working hard to set out how it wants to implement Basel III. But this may not be done by year end as hoped. Adding to this, their work on Basel III has been delayed somewhat by their responses to the pandemic. They are finding that the package is challenging. The BoE has taken account of how other jurisdictions also implement global rules like Basel. Their intelligence so far is that other major jurisdictions like the EU, the United States and others are also facing challenges. And so, they do think it would be ideal for the package to be implemented at a very similar time. So they are very open to coordinating with others.