The European Central Bank has launched a new offensive to try and standardise – or at least harmonise – bank regulations across the eurozone. It has long been the aim of the ECB to get the monetary union, consisting of of 19 different states, to reach some sort of normalisation of regulations across the board.

The chief way that the central bank wishes to harmonise and clarify rules across the eurozone is through new rules on bank capital req

Banking regulations in eurozone countries are still each controlled by member states’ own regulators and regulations. This has often resulted in large discrepancies in regulation across the region, with some regulators having and enforcing laxer standards.

The chief way that the central bank wishes to harmonise and clarify rules across the eurozone is through new rules on bank capital requirements. Since the 2008 financial crisis banks across Europe have increased their capital requirements to fend of any new crisis, at the behest of the ECB. However there are roughly 150 national variations of how capital is defined.

The ECB originally hoped to clarify this by phasing in new definitions of capital in 2022, but will now be bought forward to 2018. This will eurozone-wide new definition will, according to Reuters, “shorten the period it lets banks include deferred tax assets in their capital level. Banks will also see the pace at which they can continue to hold insurance subsidiaries in their common tier 1 capital reserves.

The new definition of capital requirements will see an end to banks being able to classify deferred tax assets as part of their capital holdings. Some banks have complained that the definition and resulting increased requirements are not needed, as they have already significantly boosted their capital reserves since the crisis.