The banks in the European Union will not receive the hoped-for delay in implementing stricter capital rules. EU Commissioner for Financial Services, Mairead McGuinness, insists that the so-called Basel III rules "should enter into application in January 2025" – pending final approval of the co-legislators in the European Parliament and EU member states.

This could lead to a competitive disadvantage for EU banks compared to banks in the United States and the United Kingdom. The British have declared their intent to align with the plans of U.S. regulators. This alignment involves the gradual implementation of international recommendations from the Basel Committee on Banking Supervision, starting from July 2025. EU banking associations are calling for a deadline of at least 18 months.

This would mean that stricter capital requirements would not take effect until mid-2025 at the earliest. In Brussels, the banks have hit a roadblock. The technical fine-tuning of the relevant laws has been completed, bringing comprehensive reforms following the global financial crisis in 2008 and 2009 to a conclusion. "We don’t underestimate the challenge for banks to implement the package as of that date", McGuinness told Börsen-Zeitung regarding January 2025. She points out that "the prudential requirements will come in with very significant transitional arrangements".

For instance, the output floor will for example be phased in between 2025 and 2030. This refers to limitations on the use of in-house models to calculate capital requirements set out in the reform. "I think that 7 years from now should be sufficient to avoid excessive cliff effects", states McGuinness. She rejects a grace period to prevent a "race to the bottom". The European Commission is "watching what is happening in other Jurisdictions when it comes to Basel implementation – there is a competitiveness angle, we are not naive."

According to McGuinness, co-legislators have introduced the necessary flexibility to prevent competitive disadvantages. "For instance, where needed, we can postpone the application of market risk rules to avoid that EU banks would be penalised vis-à-vis their international counterparts."

Representatives of EU member states, as well as the relevant parliamentary committee for economic and monetary affairs (ECON), are expected to approve the final agreement by mid-December. Afterward, only the EU Parliament needs to give its approval, which is likely to happen in January.

Green Party representative Henrike Hahn contradicts McGuinness' portrayal that the EU has remained faithful to the Basel Agreement. The final outcome of the banking package will "clearly fall behind internationally agreed standards for banking reform in some key points."

A basic compromise with certain transition periods and exceptions has been in place since the end of June. Industry associations were satisfied at the time but complain that the legislative process continues to be delayed.