Jonathan Faull, a director general at the European Commission, requested that the European Insurance and Occupational Pensions Authority review Solvency II capital charges. AFME supports the request, having noted concerns with capital charges for securitisation.
European finance ministers are set to meet Wednesday to discuss Basel III capital rules for banks. Officials have struggled to reach an agreement on the rules, which will force banks to come up with billions of euros in capital. Sweden is expected to stand its ground on the right to subject banks to tougher capital rules. The disagreement highlights a challenge facing Europe as its financial sector permeates national borders, while many rescue efforts fall on individual countries.
The Spanish economy contracted 0.3% in the first quarter, starting a double-dip recession. Meanwhile, Standard & Poor's downgraded the credit ratings of 11 banks. PIMCO CEO Mohamed El-Erian said Spain's crisis will "worsen into a vicious cycle" unless steps are taken to calm the banking system and change the labour market.