U.S. Delays Basel III Adoption for Banks

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U.S. financial institutions will not be required to start complying with Basel III capital and liquidity requirements by Jan. 1, according to a joint statement issued by regulators on Friday.

More than the 2,000 comment letters have been filed with the three banking agencies – the Federal Reserve Board, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency – raising issues with a June proposal to adopt Basel III in the United States.

Many of those letters filed by community bankers have sounded the alarm that they could be forced to comply with the new requirements by a global deadline of Jan. 1. The package of rules is designed to improve the quality and quantity of capital that banks of all sizes must hold to prevent a repeat of the financial crisis.

"Many industry participants have expressed concern that they may be subject to a final regulatory capital rule on Jan. 1, 2013, without sufficient time to understand the rule or to make necessary systems changes," the agencies said in a joint statement.

Regulators did not provide a target on when they expected the rules to come into effect.

Still, U.S. regulators stressed their commitment to implementing the rules agreed upon by the Basel Committee on Banking Supervision in December 2010.

"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 agencies said.

The decision to postpone adoption of Basel III comes days after the Senate Banking Committee, chaired by Tim Johnson, D-S.D., announced plans to hold an oversight hearing on Nov. 14 focusing on regulators' proposal.

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