EU reaches an agreement on last stage of (Basel 3) banking ‎rules

European Union reached an agreement on Tuesday to implement the last phase of the tougher bank capital rules agreed upon internationally in the aftermath of the global financial crisis more than a decade ago, with additions to contain risks from the cryptocurrency sector.

According to “Reuters”, the remaining part of the global “Basel 3” agreement, agreed upon by the G20 and other countries, includes guarantees such as imposing restrictions on major banks that use their internal models in calculating capital reserves.

The collapse of Silicon Valley Bank and other US banks, and the spread of its repercussions across Europe, and the forced acquisition of (UBS) bank of its smaller competitor, Credit Suisse, shed light on bank capital and liquidity.

“It is a big step forward that will help ensure that European banks can continue to function also in light of external shocks, crises or disasters,” said Elisabeth Svantesson, Finance Minister of Sweden, which holds the EU presidency.

The provisions of the Basel 3 agreement will be implemented between the European Union countries and the European Parliament in stages, starting from 2025, that is, two years after the globally agreed deadline.

The package includes new elements to protect banks from the risks of the cryptocurrency sector and to ensure improved reporting methods and disclosures for banks regarding fossil fuels.

It also tightens the requirements for opening branches of European Union banks in third countries or opening banks outside the European Union, and supervising their activities in the bloc, an issue that emerged after Britain’s exit from the European Union.

There are also new rules that ensure that senior bank executives are “fit and fit” for the job

The European Union is the first major authority with jurisdiction to reach an agreement on the remainder of the (Basel III) rules, before Britain and the United States.