Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair said Wednesday that the Basel Committee on Banking Supervision's new capital plan should have been tougher.
"The standards are not as high as many of us would have liked. But it was important to achieve international agreement," Bair said of the Basel plan in prepared remarks to a Mobile, Ala., economic conference. "And there should be no doubt that these new standards are a major improvement over current requirements."
Under the so-called Basel III plan, the committee called for 7% common equity standards by 2019, and raised the prospect of higher capital standards for the largest banks.
The regulators overseeing the Basel Committee "made clear that systemically important institutions would be required to have loss absorption capacity beyond the minimum standards we announced on Sunday," Bair said at the Coastal Economy Outlook Conference, hosted by the University of South Alabama.
On a separate topic, Bair noted FDIC efforts to encourage banks to assist in the Gulf Coast recovery, including a July guidance urging help for creditworthy borrowers hurt by the BP oil spill, and "monitoring [of] the most affected banking institutions." She said she was meeting later Wednesday with local bankers to discuss their concerns.