FOR IMMEDIATE RELEASE
ICBA CEO Speaks Out on Basel II
Calls Attention to the Need to Protect Local Economies
Washington, D.C. (May 7, 2007)—Camden Fine, president and CEO of the Independent Community Bankers of America (ICBA) today made the following statement regarding Basel II risk-based capital rules:
"As Congress turns its attention to Basel II, ICBA urges lawmakers to allow the banking regulators to continue with their current approach regarding capital safeguards. Large banks should not be allowed to have a capital advantage over community banks in the United States. Lowering the minimum capital requirements under Basel II for the largest banks will result in a competitive and pricing disadvantage for Basel I banks. We cannot allow this to happen. Community banks are the primary source of credit to consumers and small businesses in this country and drive our local economies. Congress must take care not to upset the carefully crafted capital approach taken by the banking agencies to safeguard our nation's banking system and to ensure the continued vitality of the smaller towns and cities across our land.
"ICBA strongly supports giving large Basel II banks the option of using the regulators' standardized approach, provided community banks are allowed to remain under the existing Basel I framework.
"In addition, we recommend the agencies conduct another quantitative impact study in 2008 to determine the effect of Basel II and a revised Basel I on minimum risk-based capital. Such a study would show us if there are competitive disparities between Basel I and Basel II that would be mitigated by Basel IA. If such disparity exists, then the regulators should put the three-year transition period on hold until they can revise Basel II. If Basel II cannot be revised, then all banks should be required to use either Basel I or IA.
"ICBA looks forward to working with both the regulatory agencies and Congress as the debate moves forward in order to ensure that community banks and the strength of our nation's economy are not compromised."