EU Delays FRTB Implementation Amidst U.S. Deregulation Ambiguity

The European Union has decided to further delay the implementation of new trading rules as part of the Basel III package. The Fundamental Review of the Trading Book, which is significant for capital and reporting requirements, has faced delays after the U.S. signaled potential deregulation in its financial sector.

A senior EU source confirmed that European Commissioner Maria Luís Albuquerque communicated the decision to postpone to finance ministers on May 13. This latest adjustment moves the adoption date to January 1, 2027. It reflects pressures from European banks worried about competitive disadvantages.

The U.S., yet to implement the Basel III package, has hinted at deregulation, leaving European banks hesitant to adopt burdensome rules their competitors might not face. Calls for synchronizing financial rules among the EU, the U.S., and Britain have gained momentum, with the European Central Bank proposing compromises and various industry groups expressing support for delays.

(With inputs from agencies.)