On Tuesday, 12 November 2019, the European Commission hosted a conference titled Implementing Basel III: Challenges and impact. The event was held in the context of the ongoing Commission consultation on Basel III implementation (see our earlier post here). The opening remarks were delivered by Valdis Dombrovskis, the Commission’s Vice-President for the Euro and Social Dialogue, Financial Stability, Financial Services and Capital Markets Union, who confirmed that legislative proposals implementing the final elements of Basel III will be published by the Commission in Q2 2020. Among other issues discussed, he suggested that “green” investments by banks should be appropriately recognised by the upcoming prudential legislation. The following keynote address was delivered by José Manual Campa, Chairperson of the European Banking Authority, who reiterated a call that all major jurisdictions should implement the final elements of the Basel III package.

The conference was composed of four thematic panels. The first panel (Basel III in a global context) was moderated by Harald Waiglein (FSC), and the panellists included Carolyn Rogers (BCBS), Pauli Kariniemi (Finnish Ministry of Finance), Rupert Schäfer (FINMA), Karin Dohm (Deutsche Bank), Nathalie Errard (Airbus) and Gilles Briatta (SG). Discussion focused on analysing how Basel III reform can contribute to further market integration and foster international cooperation, while allowing certain levels of flexibility in order to address specific circumstances of a given jurisdiction. This panel was followed by a keynote address by Andrea Enria (EBA), who – among other issues – expressed his personal view that the new output floor should be implemented on the highest possible level of consolidation of a banking group. The second morning session (The impacts of Basel III on the EU economy) was chaired by a newly elected Chair of the European Parliament’s Economic and Monetary Affairs Committee, Irene Tinagli. The panellists included Mario Quagliriello (EBA), Levin Holle (German Ministry of Finance), Mary-Elizabeth McMunn (CBI), Casper von Koskull (Nordea), Lars Machenil (EBF) and Fioreall Salvucci (Banca Intesa San Paolo). The discussion focused on how to balance the objectives of the Basel III reform, such as increasing the resilience of the banking sector, with a risk of creating potential adverse impact on European economy by creating significant increase in capital requirements for EU banks.

The afternoon session, chaired by Sean Berrigan (European Commission), started with a panel discussion focused on a proportionate implementation of Basel III. Panellists, including Othmar Karas (Member of European Parliament), Kerstin af Jochnik (ECB/SSM), Odile Renaud Basso (French Treasury), Gerhard Hofmann (EACB),Jordi Gual (Caixa Bank) and Thierry Philipponnat (Finance Watch), exchanged views on the European approach to implementation of Basel III standards, taking into account the specific characteristics of the EU banking system, and in particular those of small EU banks. The final session of the day (Basel III-are we done now?) was chaired by Martin Merlin (European Commission) and the panellists included Costas Stephanou (FSB), Rebecca Christie (Bruegel), Philippe Lamberts (Member of European Parliament), Daniel Dǎianu (Romanian Fiscal Council), Gloria Hervás (Santander) and Christian Thimann (Athora). The panellists considered whether there are any potential new risks that would require regulatory action beyond the implementation of the final Basel III standards, and in particular issues such as transition to climate neutral economy and digitalisation.