Doom loop reloaded: CRR II goes soft on sovereign debt
EC dilution of Basel liquidity and market risk rules could create new regulatory arbitrage
The European Commission review of the Capital Requirements Regulation – dubbed CRR II by bankers – is not yet one month old. But already, it is being drawn into the tense debate about the trade-off between the health of the banking sector and the health of the European government bond market.
European Commissioner for financial stability Valdis Dombrovskis, unveiling the proposals on November 23, hailed the "substantial package" as a significant step "to reduce risk and support strong banks".
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