Implementing globally agreed bank rules should not put EU companies at a competitive disadvantage
Following the European Commission’s proposals to implement the final parts of the Basel III framework for banks, BusinessEurope Director General Markus J. Beyrer said: "Financial market stability is fundamental for the economy, and this includes ensuring banks are able to properly finance the economic recovery, with EU firms not put at a competitive disadvantage compared to their international peers. The prudential regulation of EU banks has been significantly strengthened following the financial crisis and EU banks have been shown to be resilient.
We have to ensure that the implementation of the Basel III standards does not require unnecessary increases in capital for the EU banking sector, and we therefore support the European Commission’s efforts to implement the standards in a way that reflects the specificities of the EU economy and banking sector.
We support, in particular, maintaining the so-called SME Supporting Factor as it reduces the cost of lending to smaller and medium-sized companies and mitigates the disadvantaged position of such lending due to the combined effect of enhanced capital requirements and liquidity rules. We also need a solution to avoid that unrated companies will be faced with much higher borrowing costs and we support finding alternative indicators to assess the probability of a company defaulting.
We now call on all co-legislators to be thorough in their assessment of banks' capital need, given how such requirements can impact the availability and price of lending in the different Member States."