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E.U., U.S. yet to finalize Basel III regulations

Stefan Ingves

A new report on the international implementation of Basel III capital standards revealed that the European Union and U.S. have yet to finalize rules to ensure full implementation of Basel III standards before Jan. 1.

Out of the 27 member jurisdictions, eight jurisdictions, including Australia, China, Hong Kong SAR, India, Japan, Saudi Arabia, Singapore and Switzerland, have issued the final set of Basel III regulations.

Seventeen jurisdictions, including Belgium, Brazil, Canada, France, Germany, Italy, Korea, Luxembourg, Mexico, the Netherlands, Russia, South Africa, Spain, Sweden, the U.K., the U.S. and the European Union, have published a draft of final Basel III rules.

“U.S. agencies intend to finalize the rules after consideration of public comments,” the report said. “Basel 2.5 and Basel III rule-makings in the United States must be coordinated with applicable work on implementation of the Dodd-Frank regulatory reform legislation.”

Only two jurisdictions, Argentina and Turkey, have yet to publish draft rules.

“It is clear that not all jurisdictions will be ready in time,” Stefan Ingves, the chairman of the Basel committee and the governor of Sweden’s Sveriges Riksbank, said, according to Dow Jones.

Basel III rules were designed in 2010 by the Basel Committee on Banking Supervision following the recent financial collapse. The rules are intended to build on previous versions of Basel capital standards intended to reduce risk in the global economy.

The American Bankers Association, which represents the nation’s $13 trillion banking industry, raised concerns recently regarding the impact of Basel III on the nation’s community banks, saying that the rules would hinder the ability of community institutions to lend.

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