Implementation of the new European Union Capital Adequacy Directive could be delayed by up to a year, to 2006. The delay is expected because of todays announcement by the Bank for International Settlements of a one-year delay to 2005 in implementing the Basel Capital Accord.
The controversial EU directive requires money managers to set aside regulatory capital to cover operational risks. It has angered European fund managers, who say the new requirements are harsher than those for fund managers in other parts of the world, most notably the United States.
The EU directive largely mirrors the Basel accord, and it is lagging the accord by about a year.
It is unclear, however, whether the delay will result in an EU directive that is more acceptable to money managers.