Market Analysis

French President Emmanuel Macron has called for a reevaluation of how Europe implements minimum capital regulations for banks and insurers, arguing that the current approach is overly cautious and puts the continent at an economic disadvantage. Macron highlighted concerns over the Basel III reforms, particularly regarding pushback from U.S. banks, and emphasized the need to strike a balance between prudence and fostering a culture of risk management in financial practices.

Addressing the issue at Sorbonne University in Paris, Macron stressed the importance of revising both Basel and Solvency regulations, noting that Europe should not be the sole jurisdiction applying such stringent rules. While advocating for prudent financial behavior, Macron expressed a desire to inject more risk-taking into savings management practices.

French officials have voiced grievances about U.S. banks not adhering to Basel III standards, which they argue undermines the competitiveness of European banks. Additionally, they've criticized Solvency II for forcing European insurers to maintain excessively high levels of capital, hindering investments that could strengthen balance sheets.

Macron proposed easing capital requirements as a key component of a new growth model for Europe, alongside enhancing integration of EU capital markets and introducing a pan-European savings product.

Paraphrasing text from "Reuters" all rights reserved by the original author.