AFR in the News: Banks Say Regulators Should Rewrite Basel III Capital Rules

In a 181-page letter to federal regulators, the American Bankers Association, the Financial Services Roundtable, and the Securities Industry & Financial Markets Association take aim at a set of proposed rules intended to ensure compliance with new international capital standards.

Regulators should have “conducted an empirical study of the impact of the proposals on all segments of the U.S. banking sector,” the letter complains. A draft rule for risk-weighting assets “should be simplified and easier to follow and implement,” it says, and banks need at least a year to implement such rules, in any case.

But Bloomberg’s Jesse Hamilton and Cheyenne Hopkins go on to quote AFR Policy Director Marcus Stanley making a different case. The recommended levels are “significantly too low,” Stanley says, adding that banks “can ‘play games’ because of the complexity of measuring risk-adjusted capital in the proposals.”