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

Diamond Star Joshua Adah Hacked To Death By Fulani Heardsmen

Joshua Adah who is One of the stars of Mo Abudu's Naija Diamonds Season 2 which held in 2012, was hacked to death in Taraba ... Full story

Grace Okpara, Nigerian Worker In Ogun State Tortured By Her Lebanese Employers

A Nigerian employee who has been tortured and maltreated by her Lebanese bosses is in pains at the moment. A Nigerian woman, Grace Okpara, is reeling ... Full story

PSquare Set To Bury Dad On Friday

The family of Peter and Paul Okoye the Psquare brothers  are set to bury their dad, Pa Moses Okoye on Friday, 3oth January 2015. Their dad ... Full story

I Will Be The First Entertainer To Become Nigeria's President - Davido

Popular Nigerian music sensation, Davido, has disclosed his intention to become the first entertainer to be the President of Nigeria, adding that the All Progressive ... Full story

Performance By 'AKA' At Nigeria's Industry Nite Event Postponed

Multiple-Award Winning South African artist, AKA, is unable to perform at tonight’s Industry Nite event in Nigeria due to unforeseen delays with the issuance of ... Full story

New Promo Pics Released By 'Jhybo' Looks Like A Model

Jhybo in conjunction with Lima music storm into 2015 with some great fresh promo pictures. We love the model look…. ... Full story

Check Out Throwback Pictures Of 'Davido'

Check-Out Throwback Pictures Of Davido  See his “ekeh” like 10naira puff-puff     ... Full story

Court Suspension Lifted On All Progressives Congress Fund Raising Platform

The Federal High Court in Lagos on Wednesday restrained five telecoms firms from suspending All Progressives Congress (APC) campaign fund-raising platform. Justice Ibrahim Buba made the ... Full story

We Saw Helicopters Dropping Arms, Food For 'Boko Haram'

Displaced residents of Monguno, in Borno State, which was recently taken over by Boko Haram, have said they saw helicopters dropping arms and food items ... Full story

Teachers Calls Off Strike At Ogun

The Nigeria Union of Teachers (NUT), Ogun State chapter, on Tuesday, called off its 10-day old strike. The decision was announced after a meeting between the ... Full story

Suspected 61-Year-Old Gay Man Almost Beaten To Death In Lagos

A man suspected of trying to lure a boy into gay sex narrowly escaped being beaten to death by an angry mob. But for timely intervention ... Full story

Comment on: Delay seen in implementing US bank capital rules

Rate this article

0

Breaking News

'Kim Kardashian West' Hired A Nutritionist To Help Lose Weight (VIDEO)

Kim Kardashian West has hired a nutritionist to help her lose weight. The Keeping Up with the Kardashians star, who is married to rapper Kanye West, ... Full story

'D’banj’s' Girlfriend 'Bonang Matheba' In Sexy Pose With Burna Boy (PHOTOS)

The event was a celebrity-studded all-white party in South Africa on Saturday, 24th January 2015. Hosted by rapper Da Les in his home in Northern Johannesburg, ... Full story

Federal Government To Pay N145 Million Compensation To Poultry Owners

The Federal Government has directed the compensation of N145 million to be paid to all poultry farms affected with bird flu within 72 Hours. The minister ... Full story

Guinea, Mali Qualification Hopes Lie In Ballot Votes

Guinea and Mali will have to wait until lots are drawn to decide who will advance to the quarter-finals of the Africa Cup of Nations ... Full story

Abuja Agog For Omotola At 20 (Pictures)

Residents of Abuja were excited when superstar actress, Omotola Jalade-Ekeinde stormed the city for the celebration of her 20 years in the movie industry in ...

Why I Sleep With Fresh Female Corpses—Ghanaian Morgue Attendant

Wonders, they say, will not cease to end or how would one explain why an able-bodied young man will decide in his mind to start ...

I’m Also Good To Be Nigeria’s President—Davido Declares

While other Nigerian celebrities are busy vying to be lawmakers at the state and federal levels in the forthcoming election, Davido is seeking President Goodluck ...

Buhari’s Daughter Returns To Twitter, Accuses PDP Of Hacking Her Account

Daughter of presidential candidate of the All Progressive Congress (APC), Muhamadu Buhari, Zahra, has returned to social media after she went off, sparking speculations that ...

Fuji Star, Malaika, To Move Into Expensive Ajah Home (Photo)

Reports making the rounds have it that a prominent Fuji musician, Sulaimon Alao Adekunle fondly called ‘Malaika’, is set to finally move into his new ...

It’s Nobody’s Business If I’m Married or Not—Waje Blows Hot

‘I wish’ crooner, Waje whose real is name Aituaje Iruobe, has opened up on her relationship status and said she would let people know when ...