Regulation now dominates banks' priorities and there is no sign of any let up.
The European Commission has today proposed a substantial set of revisions to several major pieces of banking regulations including the Capital Requirements Regulation (CRR) and the Capital Requirements Directive (CRD4). Commenting, Steven Hall, Banking Partner, KPMG, says:
“Today we see yet another layer of potential changes to Basel regulations which themselves are not all yet finalised. The proposed revisions introduce some welcomed proportionality in certain areas including a softening of the higher capital requirements against market risks for a 3 year period after application. This is in line with the EU having previously acknowledged the negative impact higher capital holdings could have on jobs and growth. If implemented as currently proposed we predict that Basel 4, in its entirety, could eventually add an extra €350bn to banks’ capital requirements.
“Regulation now dominates banks' priorities and there is no sign of any let up. Any relief gained from today's proposals is more than offset by the considerable amount of technical standards yet to be published which is making full implementation and planning difficult for European banks. I don’t expect Brexit negotiations to alter the course of these regulations in the UK as the PRA and UK banks will want to continue to meet the highest global standards.”
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