SIFMA today submitted comments to the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), and the Federal Deposit Insurance Corporation (FDIC) to the collective agencies’ proposals to implement new capital standards as agreed to by the Basel III capital accords. The letter was co-signed by the American Bankers Association and the Financial Services Roundtable.
The Association’s letter generally raises concerns regarding the Agencies’ concerns on the proposal’s lack of risk sensitivity, the timing of their implementation, their significant divergence form internationally agree-upon capital standards, and the absence of any quantitative analysis to justify this divergence, as well as their adverse impact on the availability of credit in a recovering U.S. economy and on the competitiveness of the U.S. banking system.
To ensure the proposed bank capital standards strengthen the U.S. banking system, the Associations believe that:
- The Agencies should re-proposed the Standardized Approach Notice of Proposed Rule-making (NPR);
- The agencies should make important changes to the Basel III Numerator NPR and the Advanced Approaches NPR prior to their finalization;
- In connection with re-proposing the Standardized Approach NPR and making changes to the Basel III Numerator NPR and Advanced Approaches NPR, the Agencies should conduct an empirical study of their proposals and take into account the results of the study, comments and other empirical analysis; and
- In order to allow sufficient time to accommodate these changes, perform the empirical study and permit U.S. banking organizations to prepare for the new capital standards, the Agencies should defer the effective date of the Basel III Numerator NPR and Advanced Approaches NPR no earlier than January 1, 2014, and defer the effectiveness of the Basel III proposals for community banks and savings and loan holding companies to July 21, 2015.