BRUSSELS (AP) — The European Union is proposing new rules on how much capital banks have to hold to protect themselves against losses, in the hope of preventing another financial crisis.
With Wednesday’s proposal, the 27-country bloc becomes the first jurisdiction to implement the so-called Basel III rules on bank capital, agreed by the world’s biggest economies after the collapse of Lehman Brothers rattled global finances.
The EU’s Internal Markets Commissioner called the proposals "a tremendously important step forward in learning the lessons from the crisis and adopting a new approach to risk."
In addition to higher capital and liquidity levels, the proposals also give more powers to banking regulators, including annual national stress tests.
