Austria's Pröll Praises Basel III Agreement

by Ulrika Lomas, Tax-News.com, Brussels

20 September 2010

Warmly welcoming the Basel III agreement, Austria’s Finance Minister Josef Pröll emphasized that the agreement serves as a positive sign of increased stabilization within the financial markets. Pröll nevertheless warned that implementation of the agreement at European level should not result in a competitive disadvantage with the US.

Emphasizing the benefits of imposing tighter risk regulations on banks, Pröll underlined the fact that the agreement will mark another important step forward on the road towards stabilization. According to Pröll, the mandatory additional capital requirements, provided for under the agreement, will serve to provide greater security, particularly as regards high-risk trade in, for example, derivatives. Global capital standards will be significantly strengthened as a result of the agreement, he continued, and better financial stability secured.

Noting that the specific requirements of regional banks must be taken into consideration when implementing the agreement, Pröll emphasized that traditional trade in credit by regional banks should not be treated on the same footing as investment bank trade. Reiterating the need to abolish the credit loan fee, Pröll explained that small- and medium-sized enterprises would benefit significantly from such a decision, adding that both investment and domestic demand would be boosted as a result and that the economic and business location would also improve.

Recommended