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Basel II gets green light from EU lawmakers

BRUSSELS, July 13 (Global Risk Regulator) – Implementation of the global Basel II bank safety rules in Europe took "a major step forward" today as a key committee of European Union lawmakers approved the text of a draft law, a top European Commission official said.

Patrick Pearson, the Commission’s head of unit for banking and financial conglomerates, said the European Parliament’s economic and monetary affairs committee – ECON – had given "an important signal" by approving, with amendments, the draft of the Capital Requirements Directive, or CRD.

The CRD, which will apply the Basel II rules in the European Union, is now well on track for a single-reading approval by the Parliament followed by approval by Europe’s Council of Ministers in October or November.

But today’s vote could mean that implementation of Basel II in Europe would be out of step with the US timetable, now stalled because of worries over the results of tests of the complex, risk-focused bank capital adequacy rules in the US. There could be problems if the US wants changes in Basel II as a result.