What is Basel III? Do we have to raise new capital by January 1, 2013? Do you have any information on the Basel III rules on your website?

The Basel III capital rules will not go into effect on January 1, 2013, and the federal banking agencies have delayed the rules indefinitely. As stated in the FDIC’s November 9 press release, “In light of the volume of comments received and the wide range of views expressed during the comment period, the agencies do not expect that any of the proposed rules would become effective on January 1, 2013.”

  • The IBA analysis of the rules’ impact on community banks has a one-page explanation of the basics of the rules, followed by the banking agencies’ summaries of the rules geared towards community banks. The agencies’ summaries are long (55 pages total), but they are significantly shorter than the agencies’ full rule proposals (499 pages total).
  • The full Basel III rule proposals are available here:
  • Capital calculators: The IBA’s Basel III page also has links to and explanations of some of the calculators that are available to estimate how your bank’s capital requirements may change after the Basel III rules are implemented:
  • The federal banking agencies Basel III calculator is intended to help banks estimate the impact of the proposed rules on their institutions. According to an ABA assessment, the calculator serves as a good starting point, but only offers a point-in-time overview of the capital requirements. The future impact of the rules is dependent on new definitions, individual loan underwriting data and changing market conditions. The calculator does not consider the increased volatility resulting from the proposals allowing unrealized gains and losses to flow through capital. Therefore, there may be institutions that meet the minimum requirements today, but could fail to meet certain capital requirements in a rising rate environment.

Banking Agencies’ Basel III Calculator

  • The ABA’s supplemental calculators cover many gaps in the agencies’ instrument, including a securitization calculator to help banks analyze the effect of the proposed securitization treatment on their applicable portfolios.

SSFA Private Label Securitization Calculator