Danish Banks Plan to Fight Against EU Adoption of Basel Rules

(Bloomberg) -- Denmark’s financial industry says it plans to fight Europe’s adoption of new global rules on capital, saying they’re unnecessary and will hurt the Nordic country’s economy.

“Basel IV requirements destroy a healthy, sensible balance between risk and buffers,” Ulrik Nodgaard, head of industry organization Finans Danmark, said in a statement. “We will therefore continue to working to find a European solution that preserves sufficient flexibility also for Danish concerns.”

Large European banks need about 135 billion euros ($153 billion) to comply with the latest capital standards agreed to by the Basel Committee on Banking Supervision, according to a new estimate that raises the stakes for policy makers and the industry. The calculation, by the European Banking Authority, anticipates an average increase in capital requirements of 24.4% for banks.

If the requirement is adopted in Europe without changes, Danish banks will need another 78 billion kroner ($12 billion) in capital, according to estimates by Denmark’s banks, working with the country’s central bank and financial supervisor. That reflects a 34% increase in requirements.

To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at fschwartzko1@bloomberg.net

To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net

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