The European Union is preparing to delay the implementation of new rules that govern market negotiation activities in markets, waiting for more clarity on deregulation projects in the financial sector of the US administration, the sources said. These rules are part of the fundamental magazine of the negotiation portfolio (fundamental review of the negotiation book – FRTB), a regulatory system to monitor market risks and a key element of the Basel III agreements designed following the financial crisis initiated in 2007.
Implemented in China, Japan or Canada, the FRTB has not yet been adopted by Great Britain or the United States, two of the world’s main financial centers. Its adoption in the EU has also been promoted for a year, until 2026, last year, when it seemed clear that the United States could not adopt the rules within the initially planned period.
Brussels’s decision is expected at the end of June after a consultation
The postponement of its adoption, on January 1, 2027, reflected the pressure exerted by European banks that fear being disadvantaged compared to their US and British rivals, said five senior officials of European and national institutions said. A high -level European source said that the European Commissioner for Financial Services, Maria Luís Albuquerque, had informed the finance ministers of the EU Member States of this postponement at a meeting on May 13. The European Commission said it would make a decision about the postponement or not of the FRTB at the end of June, after consulting the sector and its supervisors.
The FRTB governs the capital and information requirements on the negotiation assets of the banks, and in particular the way in which the risk must be measured using a standard method or specific calculations for the banks. The United States has blocked the introduction of the entire Basel III system and the administration of President Donald Trump reported that he could even soften some of the existing rules. This decision would mark a reversion in relation to the pressure exerted in favor of the strengthening controls after the financial crisis of 2007-2009.
The ECB offers a commitment
European banks have urged the EU not to impose new positions that their foreign competitors do not face. “Now it seems that this set of rules will not exist in the United States and we know that Brussels carefully examines the question,” said Bettina Orlopp, general director of Commerzbank, at a conference on Monday.
The European Central Bank (ECB), the EU Banking Banking Organization, which for a long time has been a fervent defender of a rapid implementation of Basel III, proposed a commitment at the beginning of the month. She planned to delay the rules applied to the internal risk models of the banks for one year, while those related to the standardized approach would be gradually introduced for three years from 2026.
Macron asks “synchronization” of financial rules with Anglo -Saxons
Some governments have also expressed themselves, the French president Emmanuel Macron asking for “synchronization” of the financial rules between the EU, the United States and Great Britain. At the beginning of the year, Great Britain rejected the implementation of Basel III to 2027, while Washington has not yet presented a calendar. On the other hand, the EU has already implemented most of the Basel III system, which has entered into force this year. China, Japan and Canada have done it for a long time.
In March, the European Commission launched a consultation, asking the banks and the supervision authorities if they thought that FRTB should take effect next year, delay in 12 months or modify to align more in the regulatory projects of the United States and the United Kingdom.
The European Banking Federation, a sectoral organization, said that member banks exposed to US and British competition were favorable for one year postponement. The International Swaps and Derivatives Association, an international pressure group, said that a “clear majority” of its members was also favorable for a postponement, even if a minority preferred that the FRTB entered into force next year to avoid having to apply ancient news and rules.
Source: BFM TV
