The Basel Committee on Banking Supervision announced on Sunday the latest capital requirements for large, global financial firms. Initially, Jean-Claude Trichet, president of the European Central Bank, said “the agreements reached are a fundamental strengthening of global capital standards.” He added that “their contribution to long term financial stability and growth will be substantial. The transition arrangements will enable banks to meet the new standards while supporting the economic recovery.” But there’s a catch, the European Parliament’s Economic Affairs Committee said yesterday. “Recently-passed laws in the U.S. could lead to serious inequalities in the implementation of the current Basel standards and those agreed upon this week, due inter alia to limits on the recognition of external rating agencies and to the fact that the standards are to apply only to certain types of banks,” concluded the committee yesterday. “The resolution calls on the Commission to look into this matter due to concerns about the lack of a global level playing field.” In July, President Obama signed into law the Dodd-Frank Act, ushering in wide-ranging reform of U.S. financial markets. The new Basel 3 reforms increase the minimum common equity requirement to 4.5% from 2%. In addition, banks will be required to hold a capital conservation buffer of 2.5% to withstand future stress bringing the total common equity requirements to 7%. Critics of the initiatives say the new regulations will increase costs for clients. The European commission also said no analysis has been undertaken of the effects on the real economy with the most-recent requirements agreed upon over the weekend in Basel. “European specificities regarding corporate financing need to be taken into account,” the commission said. “A ‘one-size-fits-all approach’ could stifle economic recovery.” U.S. banking agencies support the agreement reached at Sunday’s meeting of the G-10 Governors and Heads of Supervision, adding that there is plenty of time to implement the changes without onerous side effects. “This transition period is designed to give institutions the opportunity to implement the new prudential standards gradually over time,” said the agencies, in an FDIC-released statement, “thus alleviating the potential for associated short-term pressures on the cost and availability of credit to households and businesses.” Write to Jacob Gaffney.