The European Commission proposed new rules for banks yesterday in line with capital requirements agreed by global regulators – but with some tweaks, in a sign of a growing fragmentation of international financial controls.

Unveiling a large legislative package, the EU executive arm proposed adapting EU rules on capital requirements and loss-absorbing buffers to agreements reached earlier in the Basel Committee of global financial regulators, which oversees US, European and Japanese lenders.

But instead of simply replicating the rules agreed with international partners, the Commission proposed several changes and some new provisions that may upset non-EU banks and regulators.

The move comes as the EU is battling a new set of reforms expected to be adopted by the Basel Committee in the coming weeks on banks’ models for calculating risks, which the EU thinks may favour US banks.

The trend towards an increasing fragmentation of global financial rules was underlined by US President-elect Donald Trump’s statements during his election campaign about the possibility of reviewing the regulations introduced to reduce bank risks after the 2007-08 financial crisis.

We expect our international partners to stick to agreed standards

“We expect our international partners to stick to globally-agreed standards,” Valdis Dombrovskis, the EU commissioner on financial services, told reporters when asked about the possible intentions of Trump on banking regulation.

However, in a further sign of diverging agendas and conflicting interests between the EU and the US, Brussels has also decided to propose higher capital requirements for US and other top foreign banks operating in the EU, saying that this measure would increase financial stability.

The Commission has also proposed a new set of requirements for European banks aimed at making them safer.

Under the proposals, EU lenders would be required to hold a binding three per cent leverage ratio meant to reduce excessive lending.

Banks would also have to meet a so-called Net Stable Funding Ratio (NSFR), which means a bank needs to hold “sufficient stable funding to meet its funding needs during a one-year period under both normal and stressed conditions”, the Commission said in a note.

Brussels is also proposing tighter capital requirements on bank trading books of shares, bonds or derivatives, because of their higher volatility.