Todays TrendFRANKFURT, Oct 2 (Reuters) - Europe's banks need simpler rules not laxer capital requirements, European Central Bank Vice President Boris Vujcic said on Friday, arguing that robust bank requirements are a source of strength. The US has been easing some capital rules and European bank lobbies are also calling for a review of the regulatory framework, claiming it was too cautious and constrains the provision of credit. "The present level of bank capital requirements is not a competitive disadvantage for European banks," Vujcic told a conference.
"The fact that our banks are profitable and of sound standing today is a strategic advantage for Europe, because a resilient financial system is a prerequisite for sustainable economic growth." But Vujcic agreed that rules have become overly complex and regulators could simplify them without jeopardising safety. "I agree that such resilience does not necessarily require complex rules," he said. "The same level of resilience can, in many cases, be achieved with simpler ones." He said capital calculation should be simplified and various requirements, known as the capital stack, should be merged into two: a releasable and a non-releasable buffer.
He also made the case for regulators to create a materially simpler regime for smaller, less complex banks, to ease their costs. Regulators should also simplify the resolution framework, Vujcic said. (Reporting by Balazs Koranyi, Editing by Louise Heavens)
Source: Euronext Markets
