An increase in capital requirements is the single
biggest issue facing the banking industry today, with
participants calling for the Basel Committee to launch another
consultation period before finalising its regulatory plans.
There is a lot of concern about the aggressive pace of
regulatory deadlines, said Lorraine Charlton, managing
director and general counsel of the Association for Financial
Markets in Europe (AFME), speaking at the IFLR European Capital
Markets Forum today. Without a real reflection on the
impact were in for trouble.
During the last consultation period (which closed on April
16), and alongside organisations such as the British Banking
Association, AFME has been lobbying both the Basel Committee
and the G20 to revisit their implementation plans for tougher
capital adequacy rules.
And Charlton says theres growing recognition among
regulators of the need to slow down. Were hoping
for another consultation from Basel by the end of this year,
including a quantative impact study, she said. At
the moment this is a bit like the Titanic a very large
ship advancing at a very specific speed.
Existing regulatory plans would see new measures being
agreed by the end of this year, with implementation before the
end of 2011.
Michael Raffen, partner at Freshfields in London, agreed
that further consideration was necessary. New regulation
is being looked at in silos at the moment, he said.
The overall impact must be looked at more
Speakers also expressed concern over the lack of
coordination between the EU and global capital initiatives.
The EU and the Basel Committee are constantly
leapfrogging over each other, said Charlton. It
makes it very difficult for the industry to keep up.