German banks oppose US plan seeking higher capital

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Associated Press

Posted on April 29, 2013 at 6:00 AM

Updated Monday, Apr 29 at 6:34 AM

BERLIN (AP) — German banks are rejecting a push by U.S. regulators to tighten oversight of foreign banks and impose higher capital buffer requirements, saying the measures would hit their competitiveness.

The German banks' lobby group BdB said Monday the Federal Reserve proposal would put European banks at a disadvantage internationally. The measure would force foreign banks operating in the U.S. to hold as much capital as their U.S. counterparts regardless of how well their overseas parent companies are capitalized.

The measure could prove costly for some banks such as Deutsche Bank AG because of their corporate structure.

U.S. banks operating in Europe are judged on their worldwide capital level.

The European Union's top financial regulator, Commissioner Michel Barnier, also opposes the plan and warns it would increase regulatory fragmentation and invite retaliation.

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