51879
New Banking Rules Hurt European Lenders
World Economy

New Banking Rules Hurt European Lenders

Controversial new rules designed to strengthen the banking sector risk is damaging lenders’ ability to support the economy, the head of the Netherlands’ largest bank by assets said.
The comments underline tensions between Europe and global regulators only weeks before the new rules are due to be completed, Nasdaq reported.
Ralph Hamers, chief executive of Dutch bank ING, told a Frankfurt journalists’ club that in some areas, new rules—which critics refer to as “Basel IV”— would require capital increases. “The normal reaction of banks is to shrink your balance sheet,” he added.
Banks can’t help support the economy “if we don’t grow as banks,” he said. This scenario isn’t “supportive of what Draghi’s trying to do and what Juncker’s trying to do,” he said, referring to European Central Bank President Mario Draghi and European Commission President Jean-Claude Juncker.
Draghi’s institution has for years tried to prod banks to boost their lending to the real economy via ultra-cheap loans to banks and purchases of assets off banks’ balance sheets, in the hope that lenders would pass the new funds to the real economy.  Juncker has promoted a €315 billion ($346.42 billion) investment plan to support growth on the continent.
The continent’s banks argue that the proposed new rules would hurt European lenders in competition against American rivals. The rules are designed to limit banks’ ability to calculate the riskiness of mortgage assets the banks hold.
Unlike their American counterparts, European banks generally hold mortgage loans on their balance sheets. As a result, they have to offset more capital against those loans. Despite the objections, the committee, based in Basel, Switzerland, wants the rules finalized by the end of the year.

 

Short URL : https://goo.gl/8mBXvl
  1. https://goo.gl/KnHqBB
  • https://goo.gl/kwenEz
  • https://goo.gl/wzsWE4
  • https://goo.gl/DA4pqM
  • https://goo.gl/I0oObS

You can also read ...

Saudi Arabia Bleeds as Capital Flight Continues
As Saudi Arabia raises the stakes in its dispute with Canada...
Experts Say China Economy Manageable
Recent external pressures, a general global trade malaise...
 Final Nail in Abraaj Coffin
The Abraaj Group has been put through the ringer in past...
Qatar Pledges $15b Investment :      Turkish Lira Weakens 6% on Threat of More US Sanctions
Turkey’s battered lira weakened more than 6% against the...
Europe Should Resist Illegal US Penalties
European countries should take effective steps to counter US...
Australia Drought Could Cost $12 Billion
The Reserve Bank of Australia and a new report have warned of...
Indonesia Sets Moderate Growth Goals
Amid rising external pressures, Indonesia’s economy is...
 Crypto Scams on the Rise in UK
Crypto currency scams are using images of celebrities and...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus