Regulators in the United States said Friday they would postpone implementation of Basel III due to concern by industry participants that the originally proposed effective date of Jan. 1, 2013, would not leave them sufficient time to understand the rules or make necessary systems changes.
In a joint statement, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) said the regulatory capital rulemakings would be postponed indefinitely in light of the volume of comments received and the wide range of views expressed during the comment period.
As members of the Basel Committee on Banking Supervision, the U.S. agencies take seriously our internationally agreed timing commitments regarding the implementation of Basel III and are working as expeditiously as possible to complete the rulemaking process, the regulators said. As with any rule, the agencies will take operational and other considerations into account when determining appropriate implementation dates and associated transition periods.
Meanwhile, the Wall Street Journal is reporting that European Union regulators are ramping up meetings beginning today to agree on the tenets of Basel III and are still publicly committed to implementing it beginning January 1.
Basel III is the global regulatory standard meant to strengthen banks capital requirements, with rules requiring banks to hold 4.5% of common equity, 6% of Tier 1 capital, capital conservation buffers and others. They are set to be introduced from 2013 through 2018.
Critics have said Basel IIIs capital rules add to deflationary pressures as they require banks to accrue more capital.