The European Union is reportedly preparing to postpone new global banking rules governing trading activities for a second time, pushing back implementation until January 2027 as it awaits clarity on the US administration's deregulation plans.

The Fundamental Review of the Trading Book (FRTB), a key component of the Basel III package developed following the 2007-2009 financial crisis, was already delayed by one year to 2026 when it became apparent the US would miss its original deadline.

The latest one-year postponement reflects mounting pressure from European banks concerned about competitive disadvantage against their US and UK rivals, according to five senior officials at European and national institutions who spoke to Reuters.

European commissioner Maria Luís Albuquerque informed the bloc's finance ministers about the delay at a meeting on 13 May, a senior EU source confirmed to Reuters. The European Commission had previously stated it would decide on whether to postpone the FRTB by the end of June after consulting with industry and supervisors.

The FRTB establishes capital and reporting requirements for banks' trading assets, including crucial provisions on how risk should be measured using either standardised methods or banks' own internal calculations.

President Trump's administration has signalled it might relax existing financial regulations, marking a potential reversal from the post-crisis push for stricter controls. The US has stalled introduction of the entire Basel III package, leaving European banks arguing against facing additional burdens their overseas competitors avoid.

"It now looks as if this set of rules will not exist in the US and we know that Brussels is looking at this carefully," said Commerzbank chief executive officer Bettina Orlopp at a conference on Monday. "We have to be careful that we maintain the international competitiveness of European banks."

The European Central Bank, traditionally a staunch defender of timely Basel III implementation, proposed a compromise earlier this month. It suggested delaying rules for banks' internal risk models by one year whilst phasing in standardised approach requirements over three years from 2026.

French president Emmanuel Macron has called for "synchronisation" on financial rules between the EU, US and Britain. The UK pushed back its Basel III implementation to 2027 earlier this year, whilst Washington has yet to unveil a timeline.

In contrast, the EU has already implemented most of the Basel III package this year, following China, Japan and Canada.

The European Banking Federation said member banks exposed to US and British competition favoured a one-year delay. The International Swaps and Derivatives Association reported "a clear majority" of its members also supported postponement, though a minority preferred immediate implementation to avoid running both new and old rules simultaneously.

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