The third (and final) consultation by the Basel Committee on the new agreement on capital adequacy of banks, better known as "Basel 2", runs until the end of July. The objective remains to reach a final agreement by the end of 2003, so as to facilitate its implementation in the state by 2006.
The European Commission, which should translate into a proposal for a directive of the Basel 2, earlier this month published a study on the impact and at the same time also started a third consultation, which ends on 22 October. If the study sought to send a reassuring signal to businesses, indicating that the consequences of the new standards would be generally positive for banks and European companies, the new consultation indicates that Brussels intends to proceed with extreme caution in preparing the new rules. Moreover
Giulio Tremonti, the current president of the Ecofin Council, he has since raised its reservations on Basel 2, reiterated in recent days also in the budget document (see F & M on July 17).
And to support the Italian presidency in raising doubts now also operates the European Parliament, the Economic Commission which was approved a few days ago, an overwhelming majority a resolution on Basel 2, a resolution on September 1 will examine the Assembly plenary session in Strasbourg. Support is not insignificant for the Minister Tremonti, since the proposed directive, which must be approved by the co-decision procedure between the Council and Parliament, the role of MEPs will be decisive.
And to underline this role, the resolution expresses criticism of the method of developing the new rules, confined to a technocratic structure such as the Basel Committee, "has no mandate and democratic control." According to the rapporteur, the popular German Alexander Radwan, "the Commission shall take part in negotiations only as an observer, while neither the European Parliament or national ones are involved. E 'concern that the rules are so important to be left solely to technical committees." Words reminiscent of Tremonti's warning on the need for political power is not ousted from the technocratic.
In this respect, MEPs, while recognizing the need for a new agreement and accepting the basic principles, the Commission first called for a more thorough assessment of the impact on small and medium-sized enterprises and the risk they incur in higher financing costs. Second point to the possibility that an approach that rigidly fixed capital requirements of banks at risk could lead to a strong pro-cyclicality in lending. Finally, the resolution warns that if, as announced, the U.S. authorities will apply the new rules to a very limited number of banks, the risk of competitive disadvantage for European banks would be high.
certainly important that the Commission will do well to consider, Standards that might indicate the general principles but they leave room for flexibility to national authorities, as is the case across the Atlantic.
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