New Regulations Put A Further Squeeze On Lending
The Basel Committee on Banking Supervision—a group of international banking regulators that includes the Fed and the ECB—is mulling even stricter capital requirements on big banks.
The new regulations would remove the option for lenders to use their own methods to determine how much capital they need, forcing them to use the regulator's standardized method, Bloomberg reports.
Banks aren't excited at the prospect, saying it could inhibit their "ability to lend to the real economy," in a research report critical of the proposed rule.
The committee's consultation period for the new rule ends June 24, and it's unclear how long after that it'll take to get a final regulation in place.
Other recent Basel rules weighed heavily on CMBS, forcing securities issuers to hold up to 40% more capital on their trading books—at a time when the maturities wall will already put a strain on the CMBS market. [Bloomberg]
