Basel Rules Deliver ‘Body Blow’ to American Economy, Require $60 Bln More in Bank Capital

Wayne Abernathy, executive vice president of financial institutions, policy and regulatory affairs at the American Bankers Association, says the Basel global capital standards are a bad fit for the U.S. and will require American banks to add at least $60 billion to their already “high” capital levels.

“If imposed without adjustments the new Basel rules will deliver another body blow to an American economy already reeling from uncertainty, huge government deficits and debt, and the threat of major tax increases. Designing global capital standards was the assignment given to the regulatory experts in Basel. What they came up with may be a good fit for Europe or elsewhere, but given its complexity that is unlikely. It is certainly a bad fit for the United States.”

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