Commenting on the EU compromise on Basel III, our Senior Policy Fellow deplores that EU lawmakers missed the opportunity to strengthen the stability of the European financial system after the collapse of Silicon Valley Bank and Credit Suisse.
On 27 June 2023, the European Parliament and the EU member states reached a provisional agreement on the EU banking package, which aims to ensure that internationally agreed Basel III standards for banks’ capital will gradually take effect from 2025 onwards in the EU.
Our Senior Policy Fellow Sebastian Mack criticises the transitional rules in comments with the Börsen-Zeitung: "The EU is watering down the Basel rules for no reason because banks could certainly cope with higher capital requirements.” The interest rate turnaround is giving the banks billions in risk-free profits on their balances at the ECB. Now, the banks do not have to put these excess profits into strengthening their capital but can use them to pay out higher dividends and bonuses.
You can find Börsen-Zeitung's coverage (in German) here and here.