Delay seen in implementing US bank capital rules

// News | General | Delay seen in implementing US bank capital rules
Email to a friend Plain text Print version // Font size: Decrease font Enlarge font

United States banking regulators do not expect proposed rules requiring financial institutions to hold more capital to take effect on January 1, as regulators work through a flood of industry comments on the proposals.

Reuters reported that regulators had received more than 2,000 comment letters since the rules were proposed in June to implement the international agreement on bank capital known as Basel III.

The agreement is considered one of the most critical reform efforts to make sure the global banking system is more resilient in the aftermath of the 2007-2009 financial crisis.

“We have received a large number of comments and want to closely consider each issue,” Federal Reserve Board Governor Elizabeth Duke told a group of community bankers on Friday.

The Fed, the Federal Deposit Insurance Corp and the Office of the Comptroller of the Currency said in a statement on Friday that tougher capital requirements would be delayed beyond January 1.

They did not indicate when they plan to finalize the proposed rules.

The delay adds to concerns that international agreements on financial reforms are fraying, as policymakers cope with strong industry pushback and disagreements with foreign counterparts about the best approach to reduce risk in the financial system without stifling economic growth.

Under the proposed rules, which were to be phased in over six years, banks would have to hold about three times more basic capital to protect against potential losses. The biggest banks would hold even more. The amount of reserve capital that banks must hold would be determined, in part, by the riskiness of their assets.

Banks have agreed that they need to hold more capital to guard against losses, but have criticized the particulars of the proposed rules.

Large banks say the rules go too far in forcing them to hold extra capital. Smaller banks have argued that extra costs to comply with the rules could hurt their ability to lend, stifling the U.S. economic recovery.

Many in the industry have said the rules, particularly the formulas used to determine how much capital to hold for riskier assets, are much too complicated. Some regulators have proposed exempting smaller banks from that portion of the rules, while others have suggested throwing out the rules entirely in favour of a simpler plan.

A bipartisan group of 53 lawmakers asked regulators in September to consider whether community banks should have to comply with the new standards.

Karen Petrou, managing partner of consulting firm Federal Financial Analytics, said observers expect community banks will have to hold more and higher-quality capital but not follow the same risk-weighting models larger banks will use.

Officials from the three bank regulators will appear before a U.S. Senate committee hearing next week focused on the impact of the proposed rules.

Industry groups also have said the January effective date would not give institutions, especially community banks, enough time to comply with the rules.

Regulators had already extended the comment deadline to give firms more time to determine how the requirements would impact their businesses.

“Even if they published the rule today, there’s no way they could give enough time for anybody to comply for a January 1 deadline,” said Wayne Abernathy, head of regulatory affairs at the American Bankers Association.

“Everybody’s recognizing that this is important stuff, you’ve got to take the time to get it right,” he said.

Implementation of the last set of Basel rules – Basel II – was plagued by delays, especially in the United States, and some observers have worried that the new rules could face the same obstacles.

Tagged : No tags for this article

Headlines Newsview all

Pastor Chris Oyakhilome's Wife Files For Divorce On The Grounds Of Adultery!

Nothing hides forever. May God forgive me, but I have said it here before that Pastor should come open and tell us if marrying More ... Full story

National Universities Commission Publishes List Of Illegal Universities In Nigeria

The National Universities Commission (NUC) wishes to announce to the general public, especially parents and prospective undergraduates, that the under-listed “Degree Mills” have not been ... Full story

Nigerian immigrants seeking asylum under harsh conditions in Pretoria, South Africa - Video Video

Here are some photos and a video shot that captures the plight of Nigerian immigrants seeking asylum under harsh conditions in Pretoria, South Africa. According to ... Full story

Nollywood Actress Kate Henshaw Going Into Politics - Video

Kate Henshaw has told Reporters that she will be taking a break from acting for now to pursue her political career. She also says she ... Full story

Nigeria’s Health Minister Onyebuchi Chukwu Confirms Ebola Death In Port Harcourt

Nigeria has confirmed its first Ebola death outside Lagos – a doctor in the oil hub of Port Harcourt. Nigeria’s Health minister Onyebuchi Chukwu said the ...

Charly Boy Gives Lessons On Marriage

Son of late Justice Chukwudifu Oputa, Charles, better addressed as Charly Boy, says marriage is not all about finding someone who matches up with on ... Full story

Samuel Sadela, Nigeria’s Oldest Pastor, Dies At Age 114

The Founder and President of the Gospel Apostolic Church, Pa Samuel Sadela, has passed on. He was aged 114. Although a senior pastor in the church reportedly ...

Nigerian soldiers that fled to Cameroon following a fierce battle with Boko Haram militants, return

Some of the Nigerian soldiers that fled to Cameroon following a fierce battle with Boko Haram militants in locations around Borno and Adamawa states have ...

Pastor Chris Oyakhilome Says Many Pastors Will Go To Hell

Founder and head pastor of Believers Love World, popularly known as Christ Embassy, Chris Oyakhilome left members of his church shocked with his revelation while ... Full story

Ebola scare: Passengers quarantined at Scottish Airport after 10-year-old Nigerian passenger became ill

 Shocked airline passengers were recovering following a terrifying ebola scare which saw them quarantined for 90 minutes at a Scottish Airport yesterday, Mailonline reported.More than ... Full story

Fulani clash with Eggon youths in Nasarawa State leaves 17 dead

No fewer than 17 people were killed on Sunday night during a clash between suspected Eggon youths and their Fulani counterparts in  Alingani Fadaman Bauna, ... Full story

Comment on: Delay seen in implementing US bank capital rules

Rate this article

0

Breaking News

Chris Oyakhilome's Wife, Anita Files For Divorce On Adultery Grounds

News reaching Nigeriafilms.com from The Cable has it that the dissolution of the marriage between Christ Embassy Church founder, Pastor Chris Oyakhilome, and his wife, ...

"You Do Not Have To Have University Education To Be Able To Make It" Folorunsho Alakija

No one would immediately believe that Mrs Folorunsho Alakija one of Africa's richest women and chairman of Famfa Oil never had a University education.The mother ...

Davido Lied! He Can’t Afford The Acquisition And Maintenance Of A Private Jet, See Why- Pas Chikero

Davido Lied! He Can’t Afford The Acquisition And Maintenance Of A Private Jet, See Why- Pas Chikero Nigerian Entertainers love to create hype with things ...

"The Devil Is Taking It Personal To Attack Marriages" --Mercy Aigbe

Nollywood actress Mercy Aigbe is giving advice to ladies who are not yet married, she said there is no need to rush into marriage and ...

You Cannot Return Me To My Parents- Tiwa Savage Tells Husband

With the whole break up saga that goes around celebrity marriages these days, singer, Tiwa Savage-Balogun has intended to stay married no matter what.The singer ...

MISTRESS TEARS MOVIE DIRECTOR’S HOME APART

Another scandal is currently raging in Nollywood. And this time, it involves an elderly movie director who cannot put his two legs in one place. ...

FASHION POLICE REPORT: I Strongly Disapprove of This Look Tiwa

Tiwa Savage in a denim mini dress from the Agbani Darego collection Tiwa Savage (popularly known as the first lady of Mavin Records), stepped out in ...

I Don’t Show off My Wealth Because I Need My Fans Love……….Rapper, Reminisce

Yoruba rapper, Remilekun Shafaru popularly known as Reminisce, says he almost quit music four months before his fortune improved.According to the indigenous rapper, he actually ...

FG pays N25bn GENCOs’ gas debts to boost electricity supply

President Goodluck Jonathan, yesterday, said the Federal Government has paid off power generation companies,’ GENCOs, N25 billion debts owed gas companies for gas supplies in ...

BREAKING NEWS: Nasir El-Rufai Mocks Boko Haram Revealed Sponsors: SHERIFF AND IHEJIRIKA

In a recent interview with Arise TV, Australian hostage negotiator, Stephen Davis, revealed some Nigerians whom he claimed were allegedly behind the sponsoring of the ...