Italians throw a spanner in the eurozone banking works

Fabrizio Saccomanni said Italians would delay Basel 111. Picture: Getty
Fabrizio Saccomanni said Italians would delay Basel 111. Picture: Getty
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BANKERS and politicians were thrown off balance yesterday when a key eurozone central bank revealed that the introduction of new capital rules are set to be delayed by up to a year.

The move came as a House of Lords committee urged the UK government to go into battle for the City at today’s European summit on eurozone banking union.

Fabrizio Saccomanni, director general of the Bank of Italy, told a meeting of business leaders in Rome: “We are going towards a postponement of Basel 111 to the end of 2013, January 2014 at the latest.”

Austria’s banking regulator said it also expected a delay, though only until the middle of next year. Helmut Ettl, co-head of Austria’s Financial Market 
Authority, said: “We assume that it [new capital rules] will certainly happen in the course of 2013. I think there are good chances that the whole thing can take effect from 1 July.”

Some delay to the implementation of Basel 111 had been expected in both Brussels and London after the recent decision by United States’ policymakers to abandon the January 2013 target.

There had also been difficulties between individual European Union (EU) countries and the bloc’s parliament in finalising the new capital rules designed to help prevent a repeat of the 2008 financial crash.

Meanwhile, Lord Harrison, chairman of the House of Lords EU sub-committee on economic and financial affairs, urged the British government to fight at today’s European summit “for the City of London to retain its premier position as the centre of EU financial services”.

Harrison said: “It is vital the UK government get the negotiations right so that the banking union does not undermine the single market as a whole and the single market in financial services in particular, which is so vital to the UK and the City of London.”