The European Parliament has voted against further capital requirements for banks, originally stipulated in the Basel III directive.
The Basel Committee on Banking Supervision (BCBS) intended to limit the use of bank-internal models for credit risk calculations and to increase capital requirements for market and operational risks.
However, the European Parliament has adopted a resolution, which refuses any future overall capital increase for banks. On the contrary, it expresses concerns that higher capital requirements may endanger credit supply and the competitiveness of European financial institutions.
The vote in the European Parliament earlier this week took place only one day after the European Commission had adopted its proposals for the revision of European banking regulation.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens, said: “This resolution makes clear that the post-crisis mood for tough financial regulation has changed. The financial industry has successfully lodged the idea of over-regulation in the minds of politicians.”
However, Giegold did not vote against further capital requirements saying that the financial system continues to be overly complex and some big banks are still thinly capitalised.
He added that it is appropriate to further increase capital requirements for the weakest and riskiest market players.
Gielgold was in the minority as the resolution was carried by a large majority of conservatives, social democrats, liberals and eurosceptics.
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