Bank bonus, capital rules are 2012 priorities for EU regulator

The European Union’s top bank regulator will focus on developing tougher rules for lenders’ capital, bonuses and liquidity this year.

The European Banking Authority will use data on bankers’ bonuses “for the design of the technical standards that it will develop in 2012-2013,” the agency said in a document posted on its website yesterday. The London-based EBA will make rules for banks to hold “better quality capital” as part of the region’s implementation of global standards known as Basel III.

The EBA told banks last month to raise 114.7 billion euros ($147.3 billion) in fresh capital by the end of June as part of measures introduced to respond to the euro area’s sovereign-debt crisis. Lenders should look to bolster reserves by cutting bonuses, retaining earnings or issuing shares, it said.

“The main objective of the EBA in the regulatory policy area is to play a leading role in the creation of the single rule book for the EU banking system,” the agency said.

The EBA said it would have to complete 199 tasks to apply the Basel rules to European banks, and “not all activities can be undertaken as currently proposed without additional human resources,” the regulator said.

The authority will also collect information on firms’ leverage to develop rules for a maximum leverage ratio by 2015, develop definitions and impact studies for liquidity regulations and oversee the EU banking sector “in a way that adds value to the work of national supervisory authorities.”