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Agencies Announce Basel III Implementation Delay

Posted on 11/12/2012

The three Basel III capital proposals will not become effective on Jan. 1, 2013, as originally planned because of "the volume of comments received and the wide range of views expressed during the comment period," the federal banking agencies said Friday in a press release. The announcement shows how effective bankers have been in raising their substantive issues on the Basel III proposals, and it reflects the serious consideration the regulators are giving industry input that provides real-world information on the proposals' wide-ranging impact.

The three agencies, which are legally required to read and consider all comment letters, have each posted about a thousand such letters on their websites and are processing more. Bankers' strong response-more than 1,000 letters-has far exceeded the usual number of comments for regulatory proposals. In addition, the ABA along with the Financial Services Roundtable and Securities Industry and
Financial Markets Association joined to file a 181-page comment letter that echoes the issues individual banks raised, while discussing the proposals' many problems in great detail.

The banking industry, which embraces the concept of adequate high-quality capital levels for all banks, has emphasized that the Basel III proposals go far beyond that by subjecting capital to volatile market swings, penalizing mortgage and small-business lending, and imposing a complex one-size-fits-all approach on measuring asset risks that forces capital standards to do what other supervisory tools can accomplish more effectively.

Bankers also have shared their concerns with their congressional delegations, and many of them have sent letters asking the regulators to consider the Basel III proposals' impact on banks' ability to serve customers and support local economies. To read the agencies' press release visit: www.federalreserve.gov/newsevents/press/bcreg/20121109a.htm



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