Ease capital rules on EU banks to boost lending, banking industry says

Banking regulation is internationally coordinated by regulators, but differences remain in how the rules work in practice, and how they are implemented, the report said.

"A review of the current capital requirements and supervisory processes could free up capacity for approximately 4-4.5 trillion euros of additional lending in a best-case scenario, representing an increase of almost 30% compared to current bank lending volumes," the report said.The report said the difference in regulatory-induced costs at EU banks compared with their U.S. peers can explain 0.8-1.0 percentage points of a gap in return on equity, which is a measure of profitability.

"Policymakers should redouble their efforts to complete the banking and capital markets unions," the report said, referring to EU projects to deepen its capital market and create a more competitive cross-border banking market. "For their part, banks should sustain their focus on improving operational efficiency and digitisation. They should position themselves for a long-expected process of consolidation in the euro zone that will also foster better allocation of resources across EU borders."The EU is finalising the remaining leg of global bank capital rules that were written in response to the financial crisis, with temporary waivers from some elements.

Swedish bankers are having a tumultuous day today..

I mean, it's not as if the rules were put in place after the last bail-out of the banks following a crisis. But sure, let's repeat history!

ECB is tightening to combat inflation. Banks want more inflation?

Is increased lending the real answer to a cash 💰 crunch in a small and medium business? My response is no as interest payments add another layer of recurring costs and even with a payment holiday does little to stem the real problem. Ask any government how borrowing impacts

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