For the last week and a half, people across the globe have been focused on the London Olympics. The Olympics is a compilation of competitive sporting events that are based on an international set of rules. While the larger countries like the United States, China and Australia have more opportunity to win the most medals, every country is on equal footing for each one-on-one contest. Even the smallest of nations, like Jamaica, can and do win gold medals.
It is truly amazing to witness the best athletes in the world compete, whether they are 15 years old or 71 years old; they have each earned their way to the Olympics by being the best in their country. I believe that the structure of the games treats all countries and all competitors equally and fairly.
Contrast that international event to what community bankers may be facing soon with the Basel III capital rules. The Basel accords I and II were designed on the premise that all international banking transactions should adhere to a common set of rules. Since community banks rarely participate in international transactions, there has never been a need for them to be subjected to Basel agreements.
However, with Basel III establishing capital rules that attempt to weight the relative risk of individual banks, the U.S. banking regulators have determined that all U.S. banks will be subject to at least some parts of the rules. Never mind that the United States is the only country in the world with a vast community bank system. Never mind that our diversified, locally delivered financial services system has created the strongest economic power ever on earth. Never mind that applying portions of Basel III to community banks could seriously disrupt the delivery of financial services, particularly in rural America. And never mind that this action is potentially the last straw for many community banks.
These new interpretations of the Basel III accords by the U.S. regulators is currently out for comment. Comments on this 700-page proposed regulation are due Sept. 7. The ABA, ICBA and IBA are calling upon the regulators to extend the comment period deadline by 90 days. This proposed regulation is so complex that legions of attorneys cannot adequately assess the document.
Please join in this effort to seek a 90-day extension of the comment period by sending a letter to your primary regulator:
OCC banks – email to firstname.lastname@example.org; include “Basel III OCC Docket ID OCC-2012-0008, 0009 and 0010” in the subject line, or write to:
Office of the Comptroller of the Currency
250 E Street SW
Mail Stop 2-3
Washington DC 20219
Federal Reserve banks – email to email@example.com; include “Basel III Docket No. 1442” in the subject line, or write to:
Jennifer J. Johnson, Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue NW
Washington DC 20551
FDIC banks – email to comments@FDIC.gov; include “Basel III FDIC RIN 3064-AD95, RIN 3064-AD96 and RIN 3064-D97” in the subject line, or write to:
Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street NW
Washington DC 20429
Perhaps by working together we can, like the Olympics, treat everyone fairly.