Bloomberg News

Erste’s Treichl Says Europe Should Enact Basel Accord Uniformly

October 11, 2011

Oct. 11 (Bloomberg) -- Erste Group Bank AG head Andreas Treichl said Europe should implement new rules by the Basel Committee on Banking Supervision in a uniform way and refrain from rules that differ from country to country.

“It’s not going to be a level playing field in Europe,” Treichl told European Union lawmakers in Brussels today. “There are too many people and countries in Europe who are trying to improve it on their own,” he said. “Why don’t we just agree that we all accept Basel III as it is. It’s great and it’s going to make banking safer.”

Treichl said it is a “dangerous path” to change bank capital rules without first resolving the European debt crisis. “If you are a bank in a country that doesn’t receive private funding anymore, whether you have a capital ratio of 8 percent, or 10 percent, or 12 percent, or 15 percent, or 18 percent is completeley irrelevant,” he said. “If you hold a lot of debt from that country that doesn’t receive private funding, you’re bust.”

Treichl, whose bank is the biggest in Austria and the second-biggest in eastern Europe, said he “just can’t accept” that the new Basel accord doesn’t help lending to companies “whose only mistake is that they are too small to get a rating.”

“While we increase the capital requirements for lending to the real economy, high-frequency trading has tripled over the last three years,” he said. “I’d love to have something that kills this stupid business tomorrow.” Erste generates more than three-quarters of its revenue from retail clients and small and medium-sized companies.

To contact the reporter on this story: Boris Groendahl in Vienna at

To contact the editor responsible for this story: Peter Chapman at

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