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

Mallam Nasir El-Rufai loses son in Abuja road crash

Tragedy hit the home of the former Minister of the Federal Capital Territory, Mallam Nasir El-Rufai, in the early morning of Tuesday when his son, ...

Blessing Okagbare Wins 100 Metres Gold At Glasgow Commonwealth Games - Video Video

Blessing Okagbare wins women’s 100 metres gold in 10.85 seconds to increase Team Nigeria’s medals haul at the ongoing Commonwealth Games in Glasgow. Okagbare also erased ...

Bomb Blast Rocks Kano Again, Many Feared Dead

Another explosion hit Kano, coming just 24 hours after the state suffered three bomb explosions in different locations. Today’s blast took place at the NNPC ...

Asari Dokubo: "Bomb attack on former Military Head of State was planned by Buhari himself"

This might look weird, but the former militant leader, Dokubo-Asari has alleged that the bomb attack on former Military Head of State was planned by ...

Kano State Catholic Church Bomb Blast Kills 6, Injures 13

2 Bombs went off in northern Nigeria’s main city of Kano, killing 6 people and wounded 13 others on Sunday, a senior police officer said. The ...

19 Yrs Old Ghanaian Girl Commits Suicide After S3x Tape Leaks - Video

The Ghanaian Girl who Became Famous After a video of her and her boyfriend Making Love Hit The internet Allegedly Committed Suicide, Benadicta Yeboah who ... Full story

Nigerian army arrest bomber disguised as woman in Kaduna

The Nigerian Army has apprehended a suspected insurgent in relation with the twin bomb blast that rocked Kaduna on Wednesday. The twin-bomb attacks which resulted in ... Full story

Nigerian man sentenced to death for failing to bribe policeman with N200

A shaft of pain knifed through his facial contours as he recounted the grisly experiences he had in prison for more than 23 years. Prior to ...

US, Canada Condemn Kaduna Bombings

As critiscisms continued to greet Wednesday’s twin bombings in Kaduna metropolis, an Improvised Explosive Device went off at the New Road Motor Park in Kano ... Full story

Nigeria's Nkechi Opara wins first medal in women’s weightlifting at 2014 Commonwealth Games

Team Nigeria on Thursday in Glasgow recorded its first medal at the 2014 Commonwealth Games when Nkechi Opara won bronze in the women’s weightlifting 48 ... Full story

Bishop Oyedepo: Nigeria May Split Soon

Bishop David Oyedepo of the Living Faith Church aka Winners Chapel, has warned that Nigeria is on the verge of breaking up if some issues ...

Comment on: Delay seen in implementing US bank capital rules

Rate this article

0

Breaking News

I Don’t Mess Around Because I Have A Husband—Shan George

Iconic Nollywood actress, Shan George has exclusively disclosed to Nigeriafilms.com that she is currently with a man she calls her husband and not messing around ...

Bishop Tom Samson Declares War In Lagos August 3

Fire-brand preacher and General Overseer of Christ Royal Family International Church, Bishop Tom Samson, is set to hold the 10th edition of ‘It is War’, ...

I Can’t Perform For Bola Ige Killer—Lagbaja Tells Omisore

Celebrities campaigning for aspiring political leaders have since become a trend in Nigeria and many artistes long to be approached by politicians because it is ...

Mavin Records’ Di’Ja’s Outfit To Dr Sid’s Wedding Horrible?

Weddings are event where elegance meets fashion. Most people pay special attention to what they wear to wedding ceremonies so as not to be disgraced ...

Kofo Akintoye, Changing The Face Of Mushin At MTN Project Fame

To some residents of Lagos, Mushin area of the state is believed to be a place where hoodlums and youths with no future ambition are ...

Ex-FCT Minister, El-Rufai Loses Son In Car Crash [Pictures]

Former Minister of the Federal Capital Territory (FCT), Nasir El-Rufai has lost his son, Hamza, on Tuesday, July 29, 2014, in a fatal motor accident.The ...

Nkiru Sylvanus In Never-Seen-Before Pictures

Screen goddess and former aide to Governor Rochas Okorocha of Imo State, Nkiru Sylvanus, is no doubt a pretty actress who is loved by many, ...

Don't Have Kids Immediately After Marriage—Fummi Iyanda Advises

Media personality, Fummi Iyanda clocked 43 on Sunday, July 27, 2014 and she took her time to advice young people.The pretty lady urged many to ...

Nollywood Is Bigger Than Oil & Gas Industry—Tinsel Star, Victor Olaotan

Popular Tinsel actor, Victor Olaotan, has disclosed in an exclusive chat with Nigeriafilms.com that the Federal Government needs to invest more in Nollywood in order ...

Nigerian Comedians Are Lazy—Comedian, Kunle Thomas

Wave-making comedian, Patrick Onyeke aka Kunle Thomas, has disclosed that his comedy skit currently showing on television has been in the pipeline for about two ...