BASEL III
Basel III
A comprehensive set of reform measures designed to improve the regulation, supervision and risk management within the banking sector.
Basel III (or the Third Basel Accord) is a global, voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity risk. It was agreed upon by the members of the Basel Committee on Banking Supervision in 2010–11, and was scheduled to be introduced from 2013 until 2015; however, changes from April 1, 2013 extended implementation until March 31, 2018.[1][2] The third installment of the Basel Accords (see Basel I, Basel II) was developed in response to the deficiencies in financial regulation revealed by the late-2000s financial crisis. Basel III was supposed to strengthen bank capital requirements by increasing bank liquidity and decreasing bank leverage.
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Think-tanks such as the World Pensions Council (WPC) have argued that Basel III merely builds on and further expands the existing Basel II regulatory base, without questioning fundamentally its core tenets, notably the ever-growing reliance on standardized assessments of “credit risk” marketed by two private sector agencies- Moody’s and S&P, thus using public policy to strengthen anti-competitive duopolistic practices.[26] [27]
Basel III has also been criticized by banks, organized in the Institute of International Finance in Washington D.C. (an international association of global banks) with the argument that it would hurt them and economic growth. OECD estimated that implementation of Basel III would decrease annual GDP growth by 0.05–0.15%,[24][28] blaming regulation as responsible for slow recovery from the late-2000s financial crisis.[29][30] Basel III was also criticized as negatively affecting the stability of the financial system by increasing incentives of banks to game the regulatory framework.[31] The American Banker's Association,[32] community banks organized in the Independent Community Bankers of America, and some of the most liberal Democrats in the U.S. Congress, including the entire Maryland congressional delegation with Democratic Sens. Cardin and Mikulski and Reps. Van Hollen and Cummings, voiced opposition to Basel III in their comments submitted to FDIC,[33] saying that the Basel III proposals, if implemented, would hurt small banks by increasing "their capital holdings dramatically on mortgage and small business loans."[34] Others have argued that Basel III did not go far enough to regulate banks as inadequate regulation was a cause of the financial crisis.[35] On January 6, 2013 the global banking sector won a significant easing of Basel III Rules, when the Basel Committee on Banking Supervision extended not only the implementation schedule to 2019, but broadened the definition of liquid assets.[36]
http://en.wikipedia.org/wiki/Basel_III
BASEL III IS HERE (MotherJones)
http://www.motherjones.com/kevin-drum/2010/09/basel-iii-here
http://www.motherjones.com/kevin-drum/2010/09/more-basel-iii
Hooray! Basel III is Working Pretty Well So Far
http://www.motherjones.com/kevin-drum/2013/09/basel-iii-working-financial-regulation-leverage