Bloomberg: U.S. Softens Basel Stance in Push for Deal on Capital Rules

The U.S. has softened its position in talks on global bank-capital rules, easing a months-long deadlock with the European Union and boosting the chances of a deal.

The Federal Reserve, which leads the U.S. delegation in the Basel Committee on Banking Supervision, is ready to compromise on the level of a disputed output floor, according to two people with knowledge of the talks. The floor is a blunt check on how much lower banks’ own estimates of asset risk can be compared with those produced by standard formulas set by regulators.

This could help bridge the gap between the U.S., which has long been skeptical of banks’ internal models, and Europe, which insists the models provide more accurate assessments in many cases. The two sides have been at loggerheads since late last year. In the intervening months, EU regulators said the talks were on hold while President Donald Trump installed new faces at the four U.S. institutions in the Basel Committee.

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