FOR IMMEDIATE RELEASE
ICBA Statement Concerning the Basel II Final Rule
Washington, D.C. (Nov. 1, 2007)—Karen Thomas, executive vice president and director of government relations for the Independent Community Bankers of America (ICBA), issued the following statement regarding the issuance by the banking agencies of the final rule implementing the advanced approaches of the Basel II Capital Accord.
"ICBA is pleased that the agencies will observe a three-year transition to the Basel II Advance-Internal Ratings Based Approach with safeguards to limit how much minimum capital requirements for our largest banks can fall, so that safety and soundness is not jeopardized. We endorse the agencies' plan to conduct a study at the end of the second transitional year that would determine whether the new framework has any material deficiencies. If the study finds material deficiencies that cannot be addressed by existing supervisory tools, those deficiencies should be addressed by changes to the regulation before the transitional safeguards are lifted.
"ICBA looks forward to reviewing forthcoming proposed rules to implement the Basel II standardized alternative for banks that do not adopt the advanced approach. From the beginning of the Basel II debate, ICBA has expressed strong concerns about the competitive inequities that may result from a bifurcated capital system where a few large banks may have lower risk-based capital standards than other banks. We will work for a standardized alternative that addresses the competitive inequities between the Basel II Advance Approach and the current Basel I rules and offers an appropriate array of risk weights and operational risk measures for community banks that do not elect to remain subject to Basel I."