Latest news with #BaselEndgame
Irish Examiner
23-05-2025
- Business
- Irish Examiner
EU set to delay implementation of bank trading rule
The European Commission is set to recommend a fresh delay to the adoption of new trading book rules that govern the trading activities of banks, pushing implementation back to 2027. The bloc is likely to delay the Fundamental Review of the Trading Book to January 2027 as it waits for clarity on how the US plans to implement the Basel rules, sources said, asking not to be identified discussing internal debates. A spokesperson for the commission in Brussels didn't immediately respond to a request for comment. Europe's plan to implement the trading regulations this year was derailed after the US failed to agree on its own version of a wider package of capital rules, which is known as Basel Endgame in industry parlance. Washington's appetite for introducing the entire package have been thrown into further doubt by US president Donald Trump's administration, which has signalled a broad deregulation agenda. The EC has already pushed back the implementation of the FRTB to 2026 avoid putting lenders such as Deutsche Bank and BNP Paribas at a disadvantage to their US competitors. It launched a consultation earlier this year on options including another one year delay or for introducing temporary tweaks to the measures that would make them less burdensome. A person familiar with discussions said Financial Services Commissioner Maria Luis Albuquerque told a recent finance ministers meeting that while a formal decision had not yet been taken, the consultation responses were overwhelmingly in favor of another one year delay. The final decision must be ratified by the College of Commissioners. With the US plans up in the air, countries including France have been putting pressure on the commission to further delay the rules to preserve a level-playing field with those rivals. They've also argued the delay would free up capital that could then be used to offer loans and stir growth in their economies. Bloomberg
Mint
28-04-2025
- Business
- Mint
Most Banks Want EU to Delay Trading Book Rules, Industry Poll Says
(Bloomberg) -- A majority of banks want the EU to postpone the adoption of new trading book rules, a survey shows, heaping pressure on the bloc to follow similar moves in the US and the UK. A 'clear majority' of participants in a survey were in favor of 'an additional one-year delay' to changing a set of rules known as Fundamental Review of the Trading Book, two influential lobby organizations said in a written response to an EU consultation. Europe's plan to implement the FRTB changes was derailed after the US failed to agree on its own version of a wider set of capital rules known as Basel Endgame. The EU Commission has already pushed back FRTB implementation to 2026 to avoid putting the bloc's lenders at a disadvantage to their global competitors. But many EU banks are demanding yet another delay saying that the previous postponement hasn't been enough. The topic has pitted Europe's largest banks, who support the fresh postponement, against smaller ones, who say it would cost them money. 'A minority of the respondents' were in favor of sticking with the current implementation plan 'to avoid continued operational complexities,' the two lobby organizations — the Institute of International Finance and the International Swaps & Derivatives Association — said in their consultation response. The IIF and ISDA polled 32 global banks on the topic, with 21 of them favoring another delay. Previous reports suggested as few as four or five banks, led by BNP Paribas SA, Deutsche Bank AG and Intesa Sanpaolo SpA, were pushing for postponement. A separate submission from the European Banking Federation also pressed the EU to consider reforms to dilute the capital impact of the changes and to consider allowing some banks to implement in 2026 while others hold off until 2027. The Commission has already spoken out against that idea. 'Probably now the idea to implement the FRTB will be in a way that is much more neutral than the current approach,' BNP Paribas Chief Executive Officer Jean-Laurent Bonnafe said during an earnings call earlier this week when asked about the matter. 'It could start with another delay of implementation, and then be followed by a change in approach.' Originally slated for implementation from 2022, the final package of Basel rules has been beset by delays. The EU introduced most of it earlier this year, but opted to postpone the trading book elements pending clarity on the US plans. The UK has announced three delays to the entire package, while the US timeline remains unclear as a new slate of regulators assumes office. The Swiss have implemented in full, as have the Canadians and Japanese. --With assistance from Claudia Cohen and Nicholas Comfort. More stories like this are available on First Published: 28 Apr 2025, 02:10 PM IST
Yahoo
16-04-2025
- Business
- Yahoo
Big banks push for simpler mortgage rules as housing market slows
Big banks are urging the Trump administration to simplify regulations relating to mortgage loan origination, servicing, and securitization in the hope that these reforms may lower costs and boost lending activity in the struggling US housing market. "In terms of mortgages, reducing unnecessary regulations would decrease homeownership costs," JPMorgan Chase (JPM) CEO Jamie Dimon wrote in his annual shareholder letter. "Streamlining loan origination and servicing standards, reducing capital requirements and simplifying securitization rules would reduce the cost of mortgages without making them riskier. These simple reforms could lower the cost of mortgages by 70–80 basis points." This push for reform comes as JPMorgan's mortgage volume fell to $11.2 billion in the first quarter ending March 31, down from $14.2 billion in the fourth quarter of 2024. Meanwhile, home lending from the bank's retail channel fell to $9.4 billion from $12.1 billion in the fourth quarter of 2024. Other banks have also struck a similar tone during recent conference calls following quarterly earnings. Bank of America (BAC) CEO Brian Moynihan told investors during the company's first quarter earnings call this week that he is hopeful for change as new policymakers take office. "It's critically important that we get this rebalance," Moynihan said. "Sometimes the regulation gets in the way of that.' At Bank of America, home lending held steady at $254 billion in the first quarter, unchanged from the previous quarter. Wells Fargo (WFC) CEO Charles Scharf echoed Dimon's sentiment, telling analysts last week that the bank supports the administration's deregulatory push. Scharf said the proposed changes would allow "more loans, take more deposits, and provide more liquidity to the markets while preserving robust regulatory oversight." Wells Fargo's mortgage volume fell to $4.4 billion in the first quarter ending March 31, down from $5.9 billion the previous quarter, further underscoring the broader slowdown in housing financing activity. Data from the National Association of Realtors showed pending home sales, a forward looking indicator of home sales based on contract signings, grew 2% in February. However, pending transactions are down 3.6% year over year, underscoring the ongoing challenges in the housing market. The average rate on a 30-year fixed mortgage stood at 6.92% as of last week, not far from the highest levels seen over the last several years. Read more: Best low- and no-down-payment mortgage lenders of 2025 The banking industry has long been lobbying for a scaled-back version of the 'Basel Endgame' capital rule, which requires financial institutions to hold significantly more capital as part of a broader post-2008 effort to strengthen the financial system. Banks argue that higher capital requirements restrict their ability to offer mortgages, car loans, credit cards, and small business loans. President Trump's Treasury Secretary, Scott Bessent, in a speech last week before the American Bankers Association, called for "modernizing" capital requirements but said the latest proposal "is not, in my opinion, the right starting point for our modernization effort." Bessent added, "Modernizing regulatory capital likely would mean reduced capital requirements for mortgage loans and some other exposures that are core to the community bank model." Meanwhile, Trump officials are also revisiting efforts to privatize Fannie and Freddie, a major policy goal that first Trump administration couldn't pull off. Bessent said the decision to release the two companies will come down to the trajectory of mortgage rates. In his annual letter, JPMorgan's Dimon cited data from the Urban Institute estimating that mortgage market reforms could boost mortgage originations by 1 million annually, particularly helping lower-income borrowers and first-time homebuyers targeting homes in the $150,000-$300,000 range. Read more: 2025 housing market: Is it a good time to buy a house? According to Zillow, the average US home value sits at $361,263, up 2.1% over the past year. 'Buying a home, still a pillar of the American Dream, is simply the best way for individuals to start building household wealth,' Dimon wrote. Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv. Sign in to access your portfolio
