Basel III's impact is already being felt. However, the greatest impact will be in early 2015. In the meantime, it is critical that community banks focus on creating efficiencies and reducing exposure within their respective loan portfolios in order to minimize any future negative effects of the new capital requirements.
Banks have no doubt felt the pain associated with pouring salt on the wound. Only time will tell whether it will ultimately lead to the necessary healing.
Shea Dittrich is a director for the financial institutions group at Sageworks, a provider of risk management software.