European Regulators to Be Pushed to Reassess Proposed Regulatory Framework

In the wake of post-Brexit changes in European Union (EU) leadership, the EU is requesting that global regulators take a fresh look “to ease key elements of a planned rule revamp, including leverage and liquidity standards,” according to a Bloomberg article quoting Jonathan Hill, the EU’s Commissioner for financial services at the Capital Markets Union.  The European Commission will write to Mario Draghi to “ask for these issues to be looked at again,” according to a draft speech that was distributed by Hill’s office.  Hill, who was appointed by David Cameron to his post less than 2 years ago, said “there is a risk to over-regulation of the financial industry”.  He is leaving the job “after concluding he couldn’t carry on in his role following Britain’s vote last month to secede from the EU.”  

Finance ministers in the EU called on Tuesday “for the Basel Committee to take care as it wraps up work on the Basel III framework so that overall capital requirements don’t rise significantly” and to avoid “differences for specific regions of the world.”  In Hill’s speech, he said that the “Basel Committee […] should weigh easier constraints on banks’ leverage and derivatives clearing, and determine whether rules have damaged liquidity in corporate bond and other markets.”

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