FOR IMMEDIATE RELEASE
ICBA Commends Congressional Oversight of Basel Capital Rules
Community Banks Call for Studying Rules’ Impact on Their Business
Washington, D.C. (Sept. 28, 2005) -- The Independent Community Bankers of America (ICBA) commended Congress for its oversight of banking regulators and their work on setting capital standards under the Basel I and II capital accords. ICBA urged regulators to reach a consensus on the competitive impact that the new capital rules have on community banks as well as on specific provisions in the new accord before finalizing them.
The summary of ICBA’s comments made in a statement sent to the House Financial Services Committee’s Subcommittee on Financial Services and Consumer Credit follows:
- ICBA remains concerned about the competitive disparities between Basel I and Basel II and recommends that the implementation of Basel II occur only when regulators have completed their analysis of its impact on capital levels and have reached consensus on its competitive impact;
- Federal regulators should also reach an agreement as to what specific changes need to be made to the new accord and should not proceed with the implementation of Basel II knowing that revisions may have to be made in the future to ensure equitable treatment or adequate capital;
- Because the elimination of the existing capital-to-assets leverage ratio could jeopardize the safety and soundness of our financial system, ICBA strongly supports the retention of the leverage ratio once Basel II is adopted;
- Regulators should consider ways to simplify Basel II.
- ICBA fully supports the current effort to revise Basel I to enhance its risk-sensitivity and to address any competitive equity concerns with a bifurcated (Basel I and II) framework. Regulators should ensure that the timetable for review of Basel I allows the industry to evaluate and compare both Basel II and Basel I changes at the same time.
To view the complete statement, visit www.icba.org.