Aug 9 - The American Bankers Association provided the following statement by Frank Keating, president and CEO, regarding the extension of the deadline for comments on Basel III.
“ABA applauds the decision to give banks and their customers more time to comment on the Basel III proposal. The proposed rules would profoundly alter how every bank in America serves its customers and communities. Nothing is more central to running a bank than how an institution counts and manages its capital, which serves as a vital cushion against the inevitable losses that occur in the lending business. The Basel plan, developed by an international group of regulatory experts, is in many ways a bad fit for the American economy. While having adequate capital is an important idea that bankers support, these new rules would make it more difficult for banks to make mortgage loans and support businesses, and would cause institutions to reduce lending when interest rates rise. Basel III, as proposed, is unwise regulatory policy and wrong economic policy, particularly now as we struggle to recover from a deep recession.
“At more than 1,000 pages, the rules are enormously complex — they will affect the entire economy and all of us in it. Our industry needs to take the time to fully understand their potential impact and let regulators know what the rules will mean for bank customers, farms and communities across the country. This extra time will help us achieve that goal. We hope that regulators will be open to additional input as the process moves forward and the potentially negative impact of the Basel plan on the American economy becomes clearer.”