The European Parliament adopted tougher bank capital rules on Wednesday as a first step to restoring confidence into markets shaken by the worst financial crisis in decades.
The parliament voted by 454 in favor, 106 against with 25 abstentions on updating rules that European Union banks will have to comply with from 2010.
“This is obviously just a first step, a response to the financial crisis but it won’t be enough,” said Othmar Karas, the Austrian centre-right lawmaker who steered the measure through parliament.
To make markets safer for investors, banks will be required to retain 5% of the securitized products they originate and sell. The reform also caps how much banks can lend each other and sets up so-called colleges of supervisors for each cross-border bank so regulators can work more closely. (Reuters)