EU seeks fix for capital double-count

Rules for investment firms would pile capital on capital in apparent error

double count - calculator - Getty.jpg

European Union lawmakers will consider a tweak to draft prudential rules for investment firms to remove an apparent oversight that could have produced a doubling of capital.

As things stand, the Investment Firms Regulation implies EU firms should ignore capital held by non-EU entities when working out how much capital the group as a whole requires – a stance some observers believe was an oversight, introduced when simplifying the bank capital rules on which the IFR proposals are based.

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