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US Basel III Final Rule on banks' capital requirements: A different-size-fits-all approach

Author

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  • Rainer Masera

    (Guglielmo Marconi University)

Abstract

The US Basel III Final Rule was issued by the Banking Agencies (Fed, OCC and FDIC) in July 2013. The Rule implements the international Basel III framework defined by the Basel Committee on Banking Supervision and represents a major overhaul of the US banks' capital requirements, since the adoption of Basel I in 1992. The Rule incorporates provisions contained in the Dodd-Frank Act (2010). The purpose of this note is to highlight some key specific features of the US standard. In particular, it is argued that the US Rule introduces, de facto, a modular approach according to size and complexity and places great emphasis on leverage requirements for systemic banks, to avoid a mere backstop character of the non-risk-based capital ratios. These two features stand in contrast with the EU transposition of Basel III (CRR/CADIV).

Suggested Citation

  • Rainer Masera, 2013. "US Basel III Final Rule on banks' capital requirements: A different-size-fits-all approach," PSL Quarterly Review, Economia civile, vol. 66(267), pages 387-402.
    • Handle: RePEc:psl:pslqrr:2013:43
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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/11541/11408
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Fève, Patrick & Moura, Alban & Pierrard, Olivier, 2019. "Shadow banking and financial regulation: A small-scale DSGE perspective," Journal of Economic Dynamics and Control, Elsevier, vol. 101(C), pages 130-144.
    2. Rainer Masera, 2014. "CRR/CRD IV: the trees and the forest," PSL Quarterly Review, Economia civile, vol. 67(271), pages 381-422.
    3. Carlo D'Ippoliti, 2013. "Introduzione: L'Unione Europea e' "mammona" (Introduction: A Pansy European Union)," Moneta e Credito, Economia civile, vol. 66(264), pages 377-395.
    4. Alessandro Roncaglia, 2013. "Introduction," PSL Quarterly Review, Economia civile, vol. 66(267), pages 369-370.

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    More about this item

    Keywords

    US Basel III Final Rule; CRR/CRDIV; capital requirements; leverage ratio; one-size-fits-all; community banks; systemic banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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