WASHINGTON, June 7 The Federal Reserve released
a proposal to implement an international agreement on higher
capital standards for banks, known as Basel III, that largely
rejects pleas by the U.S. banking industry to soften parts of
the new standards.
U.S. banks have pushed the Fed to allow them to count
mortgage servicing rights and the unrealized gains and losses of
certain securities more toward their capital requirements than
allowed by Basel III but the U.S. central bank's draft rule
would closely follow the international agreement.
The Fed board is scheduled to vote on whether to put the
proposal out for public comment later on Thursday.
The Basel agreement is the cornerstone of efforts by
international regulators following the 2007-2009 financial
crisis to make sure the global banking system is more resilient.
The focus of the new standards is on how much banks should
have to fund themselves with equity as opposed to debt so that
an institution is able to withstand significant losses.
It is up to each country to write rules to implement the
Basel agreement for its banks.
The accord, which is to be phased in from 2013 through 2019,
will require banks to maintain top-quality capital equivalent to
7 percent of their risk-bearing assets. The Fed proposal adheres
to this standard.