Bustling” capital rules for banks that keep crypto gain support in the EU Parliament-Finance
Bustling” capital rules for banks that keep crypto gain support in the EU Parliament-Finance
Legislators in the European Union have supported laws that impose new capital requirements for financial institutions, including strict rules to cover crypto -related risks. The latter affect banks that hold digital assets and are expected to come into force in January 2025.
EU legislator Charged law to implement the equity regulations of Basel III for banks
Members of the Committee on Economics and currency of the European Parliament ( ) on Tuesday supported a law to enforce the latest global Equity regulations for banks. Reuters found in a report that the legislature also included specific requirements regarding risks that come from crypto-assets.
The general rules are part of the Basel III reforms, a number of internationally agreed measures developed by the Basel Committee for Banking Supervision after the 2007-2009. Their main purpose is to strengthen the supervision and risk management of banks.
other jurisdictions, including the USA and Great Britain, move in a similar direction. However, with the European bill, Econ introduces additional regulations that oblige banking institutions to keep enough capital to fully cover crypto-asset stocks.
"The banks have to keep one euro for every euro that they keep in crypto," said Markus Ferber, a member of the committee from Germany. He stated:
Such unaffordable capital requirements will help to ensure that instability in the crypto world does not overturn to the financial system.
ECON goes harder as an EU member states
The changes that meet the recommendations of the global banking authorities represent a transition measure to further legislation. An earlier version of the bill has already been adopted by the member states, and the European Parliament must negotiate the final draft.
The EU countries proceed on accommodating if foreign banks that provide services for European customers, open a branch or convert them into a subsidiary, who is stronger. The Econ members fought a harder line, the report says.
fine tuning is to be expected. For example, the Association for Financial Markets in Europe (Afme) pointed out that the draft lacks a definition of crypto-assets. The industry organization believes that it could be applied to tokenized securities at some point.
AFME also says that the EU should avoid possible adverse effects of tightening access to international markets and cross -border services, while trying to consolidate her autonomy in the capital markets in view of the competition from the United Kingdom.
Last summer EU institutions and Member States agreement (Mica). The package is expected to come into force in 2023, but the companies have another 12 to 18 months to stick to it.
Do you believe that the European Parliament will say goodbye to the stricter capital requirements for banks with crypto-assets? Share your expectations in the comment area below.
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