The delay means that large international European banks would have a yearâs start over their US counterparts in applying the complex, risk-focused bank capital adequacy rules. During that time the Europeans are likely to enjoy lower protective capital charges, and therefore a competitive advantage, over equivalent US banks, European Banking Federation (FBE) sources say.
Thatâs a view with which many larger US banks concur. The American Bankers Association (ABA) says the delay "risks leaving US institutions at a disadvantage while the rest of the world implements the internationally agreed upon framework".
The Brussels-based FBE represents some 4,500 banks in Europe. The AMA represents a broad spectrum of large and small US banks. The US intends applying Basel II only to its largest banks, estimated by analysts at 20 or so, although these represent the bulk of the nationâs banking assets.