All's fair in love and politics -- and international bank capital rules. US financial watchdogs are making mischief with European standards that give lenders relief by treating the euro zone as a single domestic market. The Americans have a point: The bloc is not a single market for banking and that's been a problem when things go wrong. But they doubtless have an ulterior motive born of the political obstacles to reforming some of their own rules to help big US banks compete harder with their European peers.
The heart of this brewing battle, first reported by Bloomberg News, is the extra capital charges placed on globally systemically important banks - or GSIBs -- that amount to of billions of dollars and euros in equity supporting the financial system. These massive lenders pose greater risks to economies around the world because of their sheer size, their importance to payments and money flows, and how their multitude of interconnections across markets means they can spread instability like a virus.
