Challenger banks have slammed new Basel
proposals that could force them to hold five times as much
capital as their bigger competitors.
backing of UK and German regulators, they are confident the
draft changes will be defeated, and hope the Capital
Requirements Directive (CRD IV) will be pared back to ease the
burden on smaller lenders.
For years small and mid-tier banks have criticised the
EU’s decision to subject to them to the full
weight of Basel III, while their counterparts in the US have
largely been exempted. But concerns have spiked since December
10, when the Basel Committee began consulting on its revisions to the
standardised approach to credit risk.
The paper suggests hiking charges for buy-to-let mortgages
and loans to residential property developers for banks that
don’t use an internal risk-based (IRB) approach to
The changes, which will only capture smaller banks,...