European Commission Delays New Banking Rules Until 2027

European regulators say they will hold off on imposing new banking rules until 2027.

The delay, announced by the European Commission (EC) Wednesday (June 11), revolves around a regulation known as the Fundamental Review of the Trading Book (FRTB).

As the EC explained in a news release, this rule “aims to introduce more sophisticated risk measurement techniques, allowing for a closer alignment between capital charges and the actual risks banks are facing in their capital markets activities.”

The announcement follows a report last month that the EC would wait to implement the rules until it had more clarity from the U.S. on plans to ease financial regulations.

The FRTB is part of the Basel III regulatory package. It was created following the global financial crisis, but has yet to be put into practice by the U.S. or the U.K. Last year, the EC agreed to wait until 2026 to adopt the rule, to give other countries time to catch up.

“Recent international developments have indicated further delays in the Basel III implementation by some major global jurisdictions,” the EC said. “Therefore, concerns regarding the international level playing field and the impact on EU banks remain high.”

The EC argues that it has “always been committed to a timely implementation of the Basel III standards,” and that most of the requirements went into effect at the start of this year thanks to its 2024 Banking package.

In other banking news, PYMNTS wrote Thursday about efforts by consumers to find alternatives to conventional banking products as traditional credit markets show signs of strain, with mainstream banks and credit unions re-thinking their underwriting standards for both consumer and commercial lending.

As Clive Kinross, CEO of FinTech Propel Holdings, told PYMNTS CEO Karen Webster, the credit pipeline is about “as tight as it’s been over the last 10 years.”

Tariff-related macro uncertainty means that consumers who would otherwise qualify for mainstream credit are now finding themselves in different segments of the market.

The Federal Reserve Bank of New York reported last month that late-stage delinquencies on revolving debt jumped year over year. Household debt came to $18.2 trillion in the first quarter, increasing by $167 billion, up 0.9% from the fourth quarter of 2024.

For companies such as Propel Holdings, which focus on providing alternative access to credit for underserved consumers, this shift marks an opportunity to serve borrowers often overlooked by traditional institutions.

“There’s a big distinction between riskier consumers and risky business,” Kinross said.