CSBS Issues Scathing Indictment of Basel III NPRs

Now is the Time for All Community Banks to Act
October 4, 2012

There is a growing chorus of concerns about the harmful impact of the proposed Basel III rules on community banks.

Greg Gonzales, Chairman of the Conference of State Bank Supervisors (CSBS), issued a scathing indictment of the proposed Basel III capital standards and risk-weights. Excerpts from the CSBS Media Release of October 3, 2012 include –

“We are strongly supportive of the Federal Banking agencies’ efforts to improve the capital standards internationally and for systemic institutions. However, we are opposed to the approach put forth by the federal banking agencies to implement the Basel III capital accord and to incorporate a standardized approach to risk-weighted assets.”

“[The agencies/regulators] are building a capital framework that is more complex and more prone to volatility.”

“The proposed rules are highly reactionary to the most recent economic events and do not represent a thoughtful, long-term approach in the best interests of the U. S. Banking system or the national economy.”

“We do not believe there is sufficient support for many of the specific risk-weights in the framework.”

“At a time when the government lacks a long-term solution to housing finance, the proposed framework would further stifle mortgage lending by traditional depository institutions.”

“An overly complex capital structure will only increase the cost to the industry, curtails credit availability, and drive industry consolidation. This is not in the economic best interests of the United States and it will be especially damaging to the economic prospects of local communities … across the country.”

CBAI is committed to inform you about Basel III and to vigorously represent your interests with the banking regulators. It is vital that you become familiar with the proposed rules covering new capital requirements and asset risk weights. If implemented as proposed, these rules may endanger the existence of your community bank. Your opportunity to inform the regulators about their impact on your bank and to help shape the rules will expire on October 22nd. Your voice must be heard! Now is the time to speak-up - and we can help. Find CBAI’s comment letters and more at CBAI's Basel III Resource Center.