Bigger capital buffers would put European banks at a disadvantage, they say
French bankers warned that European financial institutions would be unfairly hit by the G20 proposals for banks to hold bigger capital buffers compare with their US counterparts, reported the Financial Times.
Baudouin Prot, the French Banking Federation’s chairman and chief executive of BNP Paribas said this would be particularly unjust because most of the problems which lead to the credit crisis originated in the US, said the FT story.
He warned higher capital requirements needed to be harmonised with international accounting rules and rules on asset valuations otherwise the systems in the US would allow banks based there to hold less capital than their peers in Europe.
The French government would prefer to see a strict curb on bankers’ bonuses rather than harsher capital rules, as they believe extravagant bonuses were the main cause of the financial crisis.