Implementing Basel III in Europe: disgnosis and avenues for improvement. CEPS Policy Brief No. 275, 27 June 2012

Ayadi, Rym and Arbak, Emrah and De Groen, Willem Pieter (2012) Implementing Basel III in Europe: disgnosis and avenues for improvement. CEPS Policy Brief No. 275, 27 June 2012. [Policy Paper]

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Abstract

This Policy Brief provides a preliminary diagnosis of the proposed regulatory reforms contained in the Capital Requirements Directive and Regulation (CRD IV-CRR), which translate into EU law the Basel III standards adopted by the Basel Committee for Banking Supervision, and suggests avenues for improvement. The main criticism is that the proposal is not ambitious enough. In some crucial areas, such as the leverage ratio and the long-term liquidity requirements adopted under the Basel III framework, the CRD IV-CRR proposal stops short of making a strict commitment to introduce binding requirements and instead is contented with weaker (and possibly divergent) disclosure requirements.

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