By Laura Noonan
LONDON, Dec 4 (Reuters) - Banks should not use a delay in the introduction of new global capital rules in the United States as an excuse for postponing their adoption in Europe, the head of Britain's financial watchdog said.
The European Union was expected to follow the United States in delaying Basel III global capital rules set to be implemented on a phased basis from January.
European banks have been lobbying for this delay, which was expected to be at least six months. They fear ending up being at a competitive disadvantage to U.S. rivals if the rules were not introduced at the same time.
Financial Services Authority chairman Adair Turner, speaking at a conference on Tuesday, said big U.S. banks would still be 'overtly and explicitly' required to meet standards beyond the Basel III targets under their 2013 stress tests.
'It is very important to make that point and to not allow the continuation of the game where people refer to something that has happened on the other side of the Atlantic and suggest that we can weaken as well,' he said.
Turner is a member of the global Financial Stability Board which oversaw the drafting of Basel III, rules that will triple the amount of capital banks hold compared with the run-up to the 2007-09 crisis that saw taxpayers having to rescue many lenders.
The 'disappointing' U.S. decision not to meet the 2013 start date for Basel III was discussed at an FSB meeting he attended in New York last week, Turner said.
There was a danger regulators could become overcautious as a result of the 'huge mistakes' made before the crisis, he said.
'We do have to make sure that we develop a supervisory approach that is robust where it needs to be but that is not always hyper cautious just for its own sake.'
The FSA is being scrapped in April and replaced with a new supervisory regime.
(Editing by Dan Lalor) Keywords: BANKS CAPITAL/TURNER
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