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We're a Long Way from Bedford Falls Banking

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Comments (5)
Well said.
Posted by Pegasus Intellectual Capital Solutions | Thursday, January 24 2013 at 11:59AM ET
Community banks are already heavily regulated. We have complied with all incresing regulations based upon our CAMELS rating. I see no value to Basel III as it relates to well monitored community banks. As for large banks, absolutely, they need to be broken up and only their commerical banking functions should have FDIC coverage. Too Big To Fail is where the regulatory escalation is absolutely needed to prevent anther tax payer funded bailout. You don't hurt those who play by the rules, go after those taht don't!
Posted by Tmcgraw | Thursday, January 24 2013 at 1:43PM ET
Basel III will be one more step in removing Community from Community Banking. Although our bank has had nearly no losses over the last 5 years and manage risk pretty well while meeting the diverse credit needs of our community, under rhe capital requirements of Basel III we would have to reduce our lending by 25% to remain well capitalized with 10.5% leverage capital and the loan mix we have.

This is yet another example of developing a plan to "save the world" by killing the people. The net effect of Basel III will be a reduction in credit availability.
Posted by jsneed | Friday, January 25 2013 at 12:06AM ET
In the 8th paragraph, the author identifies the failure of Basel: "It is extremely important to remember the U.S. and U.K. originated the Basel framework in the early 1970s. Over four decades, as the global economy and financial sectors changed, Basel committee membership grew to 27 countries. This growth explains why so much debate and compromise is inevitable. It also, at times, explains why original proposed rules end up watered down." So after 40 years of failure to protect the global financial industry - why do we continue to look to Basel for guidance? The unique American system with over 7,000 banks can never function under the same rules as countries with only a handful of financial institutions.
Posted by CommunityBankerman | Friday, January 25 2013 at 8:58AM ET
Thank you all for your comments. A main reason that Basel is so imperfect is because of the negotiating that has to go on between the members. The purpose of all Basel accords is to have uniform capital standards to minimize threat of systemic risk and to minimize regulatory arbitrage. It's difficult to 'protect the global financial industry' if bankers let go of their job to conduct in depth credit due diligence as many did in the years leading up to the crisis. Also, when Basel accords are implemented at different times and when regulators supervise in different ways, that also does not help. Basel was originally designed for large, internationally connected banks. Most of Basel III will not apply to community banks. Moreover the NPRs released in June are likely to be changed for community banks. Mayra Rodriguez Valladares
Posted by MRVAssociates | Friday, January 25 2013 at 12:38PM ET
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