The banking sector is preparing for a large array of regulatory measures stemming from the economic crisis of 2007-2008, but their origins extend back to the abolition of the gold standard and the introduction of freely traded international currencies.
What will Basel III mean for banks?
The main feature of the new banking regulations is an increase in capital requirements, which is a measure of the resources banks have to absorb losses. The Federal Deposit Insurance Corporation estimates a 16 percent increase in common equity requirements for the affected banks.
Claims of the impact of higher capital requirements
Bankers say that the need to hold more capital on their books means they will reduce lending to households and small businesses or raise interest rates on their loans, making them more expensive.
How stable is the financial sector now?
The financial sector faltered in March following the collapses of Silicon Valley Bank and Signature Bank due to poor management and exposure to rising interest rates – something that could have been caught by regulators but was not.
Source: https://www.aol.com/endgame-bank-rules-promise-greater-110000307.html
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