European stocks lower amid Fed hike speculation

Dutch Finance Minister Jeroen Dijsselbloem said capital requirements for some banks may have to increase under new global rules, striking a dissonant note amid a growing European consensus on softening the impact of the revamped framework.

As it wraps up the post-crisis capital framework, the Basel Committee on Banking Supervision must ensure that banks’ internal models, used to measure asset risk, are of “sufficient quality so we don’t continue to conceal risk,” Dijsselbloem told reporters in Luxembourg on Tuesday. “So I can’t rule out that the consequence could be that individual banks in Europe will face higher capital requirements.”

Bundesbank board member Andreas Dombret, by contrast, said in an interview with Boersen-Zeitung that the revised rules, due by year-end, mustn’t disproportionately affect European banks. “Not significant means an increase of zero percent or near to zero percent; that has to be the starting point for all negotiations,” he said.

As it completes the capital rules known as Basel III, the regulator is under instructions not to increase overall capital requirements significantly in the process. That promise, first made in January, left open the possibility that individual countries or banks could face a marked increase.