Federal Reserve Chairman Ben Bernanke said during a Friday hearing that the Basel III accord is a “floor, not a ceiling,” adding that the U.S. should do whatever is necessary to ensure the health of its own financial system.
During the hearing before the Senate Banking Committee, Bernanke said the Basel III capital rules, which are developed jointly by international regulators, are the “least common denominator.”
“These agreements are made essentially by unanimous consensus, and therefore, if there are few countries that are very resistant for whatever reason, that makes it tougher to get the higher standard,” Bernanke said. “So, we view them as a floor, and we are prepared to do whatever additional steps are needed in order to make our financial system safe.”
Bernanke said he was unsure whether other countries will follow the U.S. in implementing similar capital rules. He pointed to other countries like Switzerland and the U.K. that have taken steps to boost the safety of their financial systems.
“We do have a leadership position, and I hope that will happen, but I don’t think it will be universal,” Bernanke said. “I think that you’ll see different responses from different countries.”