(Corrects spelling of Deloitte commentator's surname in 16th paragraph)
By Huw Jones and Michelle Price
LONDON/HONG KONG June 13 (Reuters) - U.S. plans to delay globally-agreed reforms to make banks safer after the financial crisis will throw a system of international regulatory cooperation into confusion, European Union and Asian regulatory sources said on Tuesday.
But the rollback will be welcomed by global banks as it will allow them to cut back on how much expensive capital they must hold to support their business, the sources said.
Since the financial crisis watchdogs around the world have been working via the G20 group of leading economies to increase cooperation between regulators following the collapse of Lehman Brothers in 2008.
But the U.S. Treasury unveiled plans on Monday to upend the country's financial regulatory framework in a 150-page report that suggested more than 100 changes. (http://bit.ly/2sVxOlt)
"Trump’s proposals are going in the wrong direction," Jakob von Weizsaecker, a German Social Democrat in the European Parliament’s economic and monetary affairs committee, told Reuters. "In Europe, we must be careful not to forget the lessons of the financial crisis. It would be a huge mistake for us to follow the U.S. lead on this.”
The U.S. Treasury has called for a delay implementing a globally agreed rule on bank liquidity which requires banks to cover long term funding needs from January 2018.
The U.S. Treasury also wants to delay a fundamental review of banks' trading books, which was also agreed globally through the Basel Committee of international regulators.
This trading book review represented a major overhaul of how banks set aside capital to cover risks from stocks, bonds and other instruments kept in their trading businesses.
The U.S. Treasury said these two rules would have added new capital and liquidity requirements to existing rules banks have to follow.
The European Union has already proposed a draft law to implement these pieces of regulation.
Valdis Dombrovskis, the EU's financial services chief, said the Treasury's lengthy proposals would be studied in detail.
"It must be noted that we need to follow what the developments will actually be, whether those recommendations will really be taken on board," Dombrovskis told reporters.
An EU source said the recommendations were "a bit worrying" and raised question marks about regulation.
The Basel Committee could not be reached immediately for comment.
LEVEL PLAYING FIELDS
Asia-based regulatory experts said the U.S. Treasury's position would lead some watchdogs in their region to review their implementation timelines. They are already unhappy about having the West's post-crisis reform agenda imposed on them.