WASHINGTON The Federal Reserve Board will meet Tuesday to vote on the Basel III capital and liquidity rules to be applied to U.S. banks, the central bank said Thursday.
Fed Chairman Ben Bernanke last week said that U.S. regulators were "very close" to the rules, proposed a year ago, that would effectively adopt the global agreement.
In December, the federal banking agencies after receiving more than 2,500 comment letters, mostly from community bankers alarmed by the threat to their businesses -said they would miss the international Jan. 1 deadline for adopting the rule.
Basel III, which was initially agreed to by the 27-member Basel Committee on Banking Supervision in December 2010, is designed to prevent a repeat of the financial crisis. The Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Fed are responsible for writing the rules in the U.S. Each agency is required to sign off on the package. The FDIC and the OCC have not announced plans for action on the rules.
U.S. regulators released three proposals a year ago. The first would establish minimum capital and liquidity requirements for all banks. The second plan, known as the standardized approach, would fundamentally change risk weightings on assets, which could have a significant impact on banks' capital ratios. The third proposal, known as the advanced approach, would add requirements for the largest banks, such as a leverage ratio and countercyclical buffer.
U.S. banks have raised serious concerns about risk weightings on residential mortgages, how much capital banks have to hold against certain instruments and other matters.
The U.S. and the European Union have been slower than other governments in adopting the rules. U.S. regulators had signaled they would release a package of rules in the spring. Only 14 countries have finalized the rules, according to an April review by the Basel Committee.
In May, Fed Gov. Daniel Tarullo urged U.S. regulators to avoid delaying the rules any further.
"Opposing, or seeking delay in, Basel III would simply give an excuse to banks that do not meet Basel III standards to seek delay from their own government," said Tarullo, during a question-and-answer session following a speech at the Peterson Institute. "It would be ironic indeed if those who favor higher or simpler capital requirements were unintentionally to lend assistance to banks that want to avoid strengthening their capital positions."