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

Shocking!! We Hid Cocaine In Arik Flight Meals - Ikechukwu Chibuzor Oliver

The National Drug Law Enforcement Agency on Thursday said it had apprehended another employee of Arik Air, Ikechukwu Chibuzor Oliver, for his alleged involvement in ... Full story

3 Arrested For Swallowing 233 Wraps Of Cocaine At Lagos Airport

Three suspected drug traffickers are being interrogated for swallowing 233 wraps of powder substances that tested positive for cocaine with a weight of 5.05kg.  Three suspected ... Full story

Can You Imagine!! Rita Ora Puts Her Boobs On Display (18+)

Rita Ora might have missed the X Factor launch in London on Wednesday due to her touring commitments, but the show's judge ensured that she ... Full story

Shocking!! Boko Haram Member Disguised As Woman Was A Nigerian Soldier (Video)

A shocking video evidence that a man who was widely portrayed as a captured Boko Haram fighter disguised as a woman is a Nigerian soldier.  SaharaReporters ... Full story

OMG!!! Ex YMCMB Rapper, Tyga Caught Having S3x With A Man (18+)

A photo of U.S rapper, Tyga, having sexual relations with a fellow man is currently making rounds online. Check on it!  Popular U.S Urban and gossip ... Full story

Lagos Police Arrest Gun Runners, Recover Gun-Manufacturing Equipment

The Lagos State Police Command has arrested a 26-year-old suspect, Ayila Ejir, for allegedly manufacturing and selling guns. The equipment used for making the arms were ... Full story

NDLEA Occupies Air Arik Crew Attendant’s House, Grills Co - Workers

The National Drug Law Enforcement Agency on Wednesday stormed and occupied the Lagos house of Chika Egwu Udensi, a crew member of the Arik Air ... Full story

Lady Stabs Her Fiancee To Death Over S3x In Lagos (Photo)

A 24-year-old lady, now in police net, has explained while she stabbed her fiancé, Edet Ebong, to death with a kitchen knife. The lady, identified ... Full story

Shocking!! Man Donates Multi-Million Hotel To A Catholic Church For IDPs (Photos)

A Nigerian identified as Ray Murphy has gifted out is highly-priced hotel to a Catholic church for the purpose of improving the welfare of Internally ... Full story

Landlord Allegedly Sets Tenant Ablaze In Lagos

A landlord in the Idumota, Lagos Island area of Lagos State, Sola Solomon, has allegedly poured petrol and set fire to one of his tenants, ... Full story

Folahanmi Oloyede Not A Husband Snatcher – Civil Societies Coalition For Emancipation Of Osun State

The Civil Societies Coalition for Emancipation of Osun State has risen in defence of Justice Folahanmi Oloyede, who one Mrs. Emily Richard-Obire, accused of snatching ... Full story

Comment on: Delay seen in implementing US bank capital rules

Rate this article

0

Breaking News

Aside Women, Men Too Can Be Raped By Women…Omoni Oboli

Royal Arts Academy in conjunction with Nollywood Workshop released a new block buster movie, titled ‘Code of Silence, ’which explores the very important themes of ...

Olamide Confesses His 2 Major Fears In Life

His songs are recently turning street anthems and major club hits, yet YBNL Rapper and Boss, Olamide still has two major fears in life. The young ...

Why Gays Can't Approach Me- Ken Erics

Ken Ericks is no doubt a hunk and one of the new faces taking over Nigeria movie industry.Just few weeks ago, he grabbed City People's ...

John Dumelo Goes Into Politics

The National Democratic Congress (NDC) Presidential and parliamentary Primaries is sure to get very entertaining in every sense of the word, after Nigeriafilms.com got the ...

Check Out Ini Edo's Face Beat For AMAA Nominees Night (Photos)

Delectable actress, Ini Edo, always steps out looking elegant and graceful. She continues to up her game and maintain her standard as one of the ...

Why Omotola is Looking So Young and Fresh

Nollywood actress, Omotola Jalade Ekehinde, is really not leaving her kids out in whatever she does these days as she now spends more time with ...

OMG!! Davido Intends To Blow Massive Cash In 24hours (Photo)

The young Nigerian music star posted a photo of himself with a massive wad of cash which he intends to spend in one day    ... Full story

Warri Wolves Get Ultimatum To Pay Players

The League Management Company has given Warri Wolves 60 days to pay its players or risk losing six points in the Nigeria Professional Football League. The ... Full story

We’re Not Out Of Title Race - Kano Pillars

Nigeria Professional Football League champions, Kano Pillars, have said their record home loss on Sunday does not mean they are out of the title race. Pillars ... Full story

Nollywood Celebrities At Invasion 1897 Premiere In New York (Photos)

Prolific Nollywood producer, Lancelot Imasuen, premiere his latest movie, ‘Invasion 1897,’ in New York recently. The event was attended by some notable faces in the Nigerian ...