- Chantal Hughes, a spokeswoman for the commission
After a promising deal in September to approve the European Central Bank as region's banking sector's supervisor, making a first step of a three-phase analysis of the institutions coming under ECB umbrella, concerns the plan will not be reached in time have occurred on Tuesday. The European Commission has decided to take an extra month to decide on rules how banks should calculate their capital ratios, as Scandinavia expressed their concerns over existing plans that may unduly penalize its banks. According to bankers associations in Sweden, Denmark, Norway and Finland, a European Banking Authority would overstate the risks associated with banks' mortgage assets. These banks, which are usually one of the best-capitalized in Europe, argue the EBA's approach does not provide safety to their mortgage assets. Meanwhile, this is not a first time Nordic banks are arguing with global regulators, as in 2010 they have lobbied to change liquidity rules by the Basel Committee, as they might have destabilized the world's biggest mortgage-bond market per capita. While Scandinavia's financial industry has appealed the EBA's proposal, saying the commission should reject it, the EC would decide whether to approve this proposal or not until November. While strong financial system and closer banking union is vital for European policy markets to prevent a rerun of the longest-ever debt and financial crisis, European leaders are running out of time, as a deal should be reached before European Parliament elections in May.
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