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

Ex-Akwa Ibom NDDC Commissioner Jailed For Stealing

An Akwa Ibom State High Court has sentenced a former commissioner representing Akwa Ibom State on the board of Niger Delta Development Commission (NDDC), Mr.Godwin ... Full story

$370m Sani Abacha Cash Traced To Luxembourg

Nigerians ferrying money to Switzerland will now have to prove that such wealth is acquired legally before they are allowed to lodge such in the ... Full story

Bola Tinubu Is A Former Heroin Trafficker - US Newspaper

An American newspaper, The Daily Beast, has published and exposed details of Tinubu’s ties to a notorious heroin trafficking ring. See the full report below Nigeria’s election ... Full story

Missing $20billion Oil Money: Our Audit Report Not Reliable - PricewaterhouseCoopers

The much anticipated report of the forensic audit of the Nigerian National Petroleum Corporation, NNPC, operations on the missing $20 billion oil money may not ... Full story

GEJ Orders Release Of $20 bn Report

President Goodluck Jonathan has ordered the immediate release of the full audit report of the Nigerian National Petroleum Corporation, NNPC, accused of diverting $20 billion ... Full story

Photos And Profiles Of 4 Nigerians To Be Executed In Indonesia

Here are the photos and profiles of the 4 Nigerians who are to be executed in Indonesia for drug trafficking. Martin Anderson 50 year old Martin Anderson ... Full story

Goodluck Jonathan: Six IGPs In Six Years

The outgoing president, Dr Goodluck Jonathan has served Nigeria for six years. He was the vice president when the then president, Musa Yar’Adua died in ... Full story

Horrible:Woman Left For Dead By Lover After Beating Her Mercilessly

This man you see here, is a horrible, horrible man. You won’t believe what he did to his woman. 18 year old Malawian woman, Linda ... Full story

10 Corrupted Scandals Nigeria’s National Assembly Hasn’t Resolved

The seventh National Assembly will most likely end its tenure in early June without resolving majority of the huge misgovernance and corruption issues that characterised ... Full story

President Elect Buhari Plegdes To Investigate Sanusi’s Allegation Of Missing $20 Billion

President-elect, Maj. Gen. Muhammadu Buhari(retd.), on Sunday said his administration would take a second look at the claim by a former Governor of the Central ... Full story

Federal Court Freezes Doris Uboh Ogunkoya Accounts In 11 Banks

Justice Mohammed Yunusa of the Federal High Court in Lagos has restrained eleven commercial banks in Nigeria from honouring any transaction on the accounts of ... Full story

Comment on: Delay seen in implementing US bank capital rules

Rate this article

0

Breaking News

Singer Emma Nyra Flaunts Body On Display In A Swimsuit

Singer, Emma Nyra flaunts her body and curves in a one piece swimsuit   ... Full story

Amaju Pinnick: Nike Deal Worth 743 Million Naira

Nigeria Football Federation's president, Amaju Pinnick has revealed that American company, Nike were the only organisation that met their demands when they were shopping for ... Full story

I’m ready for probe after tenure, says Jonathan

President Goodluck Jonathan yesterday said he would be ready after leaving office for any probe of his administration’s activities. President-elect Muhammadu Buhari plans to revisit the ...

$370m Abacha loot traced to Luxembourg

… Swiss government closes doors to looters Nigerians ferrying money to Switzerland will now have to prove that such wealth is acquired legally before they are ...

Pregnant woman’s corpse returned to hospital over morgue bill

THE corpse of a pregnant mother of three (names withheld) who died at a private hospital in Onitsha, during delivery on Monday, was reported to ...

Nigeria’s Next Leader’s Ties to a Heroin Ring

BOLA TINUBU: PHOTO CREDIT-PIUS UTOMI EKPEI/AFP/GETTY IMAGES General Muhammed Buhari's political partner is a former bagman for two heroin traffickers. But that's just business as usual ...

BREAKING: Jonathan Administration Release NNPC Statement, One Day After Buhari Announces Probe

President Jonathan announced today that his administration would release the Forensic Audit of the National Petroleum Corporation (NNPC), one day after President-Elect Buhari declared that ...

Ex-NDDC Commissioner Jailed Three Years for Stealing Transformers

A former Commissioner representing Akwa Ibom State on the board of the intervention agency, Niger Delta Development Commission, NDDC, Pastor Godwin Moffat Eyo was today ...

Aftermath Of Strange Death: Consumption And Production Of Local Liquor Banned In Ondo State

Chief Moses Enimade the Oyewoga of Ireleland drinking after pouring libation After reports of strange deaths within few days, the government of Ondo State has taken ...

Chinedu Ikedieze, Wife Shun Break-up Rumour; Storm France For Holiday (Pictures)

Few months ago, rumour mongers had it that the marriage of diminutive Nollywood actor, Chinedu Ikedieze popularly referred to as Aki was in danger as ...