(Bloomberg) -- European Central Bank Governing Council member Mario Centeno said any US push to set aside enhanced bank capital rules will go wrong, and Europe shouldn’t risk taking that path.
“Europe should implement Basel III, unless they are counterproductive,” the Portuguese central banker said in an interview in London. “I suspect that a US decision to abandon these rules will misfire. Europe shouldn’t be in such a situation.”
New bank capital rules, known as Basel endgame or Basel 3.1, would impose more stringent capital requirements on banks to safeguard from future crises.
Countries across the world were due to implement them simultaneously but various jurisdictions, including the US, have since chosen their own time frames and tweaked some of the measures, prompting banks to complain about potential disadvantages.
French President Emmanuel Macron has said that Europe shouldn’t apply stricter rules than others, while Centeno’s Italian counterpart — Fabio Panetta — has warned against a “race to the bottom on Basel rules.”
--With assistance from Ruth David, Alice Gledhill and Laura Noonan.
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