- The Legislators have also inserted measures addressing dangers associated with crypto assets.
- Banking institutions will be required to have adequate capital to support crypto holdings.
A plan to impose the most recent global bank capital regulations was approved Tuesday. By the European Parliament’s Committee on Economic and Monetary Affairs (ECON). According to a Reuters report, the Legislators have also inserted measures addressing dangers associated with crypto assets.
Moreover, the basic guidelines were devised by the Basel Committee on Banking Supervision. In response to the global financial crisis of 2007-2009 and are included in the Basel III reforms, a package of globally agreed-upon policies. Primarily, they serve to improve banks’ oversight and risk management.
Several Reforms Expected
The United States and the United Kingdom are only two examples of other countries heading in the same way. Banking institutions will be required to have adequate capital. To properly support crypto asset holdings, a new requirement introduced by ECON with the European draught legislation.
Furthermore, these revisions, which are in line with the recommendations of the institutions in charge of international finance, are only temporary until more permanent legislation can be passed. Even if the proposal has been approved in principle by the member states, the European Parliament still has some work to do in order to negotiate the final form with them.
EU member states have been more flexible on the issue of whether and when international banks serving European clients must have a physical presence in the region in the shape of a branch or a wholly owned subsidiary with its own capital. Moreover, the report notes that the ECON members adopted a more hardline stance.
