-
Community bankers emerged victorious Tuesday after regulators made a number of key changes to a final package of Basel III capital rules in an effort to address smaller institutions' concerns. But the biggest banks, in contrast, fared far worse.
July 2 -
The Federal Reserve Board on Tuesday met to vote on a final Basel III package, which represents the most significant overhaul of regulatory capital requirements for U.S. institutions.
July 2
WASHINGTON Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, praised regulators on Friday for their changes to the final Basel III capital standards announced earlier in the week.
The Federal Reserve Board voted in favor of the revised standards on Tuesday, which ultimately offered significant regulatory relief for community banks and a delayed implementation timeline for some institutions. Among the changes for small banks, the rule altered the risk-weights for residential mortgages and grandfathered in some existing trust-preferred securities to be counted toward Tier I capital. Industry observers have lauded the changes to Basel III since the Fed took its vote, though some bankers still argue that small institutions should be entirely exempted.
Waters said she approved of the changes to the standards, particularly the decision surrounding trust-preferred securities, an issue that had many small bankers worried.
"I am very pleased with the efforts of the Board of Governors of the Federal Reserve who have addressed many of the concerns community bankers had expressed with regard to the implementation of the Basel III Capital Standards," she said in a statement Friday.
The California Democrat added: "Both community banks and their borrowers will benefit from cooperation between regulators and the banking industry to preserve capital standards for residential mortgages. I am also pleased that regulators looked to Congress's work in Dodd-Frank and preserved our intended treatment of trust-preferred securities, an important component of many community banks' capital structure."
