The European Union has backed a temporary relaxing of bank capital rules, along with delays to their full implementation.
The Basel III banking rules are aimed at strengthening capital reserves and oversight of institutions, lowering requirements for international standards.
The agreement reached by EU member states expands the exceptions included in the proposal submitted by the European Commission last year, as well as postponing the start of application of these rules until 2025 and granting until 2030 for them to be fully implemented.
EU states will now negotiate a final agreement with the European Parliament.
“One of our main goals was to avoid impacts on European banks that could reduce their ability to finance the European economy,” said Czech finance minister Zbynek Stanjura, speaking at a meeting of EU finance ministers.
The agreement was well received by policymakers across the country, with the German and French finance ministers saying the package had struck “the right balance”. Spanish finance minister Carlos Cuerpo said the decision “reflects an appropriate balance between good faith enforcement of the rules and respect for the prohibitive elements of the European market”, but insisted that the measures must remain temporary.
The revised rules would give relief to help neutralize capital increases for banks holding low-risk mortgages, but experts say they will make it harder for investors to compare European banks to those in other parts of the world.