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The Senate Committee on Business and Commerce is set to examine the new regulatory landscape facing Oklahoma banks later this month. On Wednesday, November 28, the committee will hold its first interim study meeting concerning the Basel III global standards, which will usher in a broad number of new regulatory requirements for banks.
The standards were agreed upon by the supervising authorities of the central bank governors of the G-10 countries in 2010-11, and will be introduced in 2013. The new regulatory apparatus was crafted in response to the financial crisis of 2007-08, and the global recession that followed. Sen. Dan Newberry, Chairman of the committee, said it is critical that Oklahoma bankers be fully informed of the new capital rules and their potential impact on financial institutions.
“Oklahoma bankers need to know where they stand with respect to the regulatory wave approaching them in the form of Basel III and Dodd-Frank,” said Newberry, R-Tulsa. “These regulations stand to significantly reshape the industry, and are a paramount concern for Oklahoma’s banking leaders. Our committee will take an in-depth look at the new regulatory landscape and its potential impact on the industry as a whole.”
Among other requirements, the new standards will increase both the amount of capital that must be held by banks, and the risk-weight on loans. Each institution will have to undertake a process of tracking 13 categories of deductions and adjustments to capital and any changes on risk-weighted assets on a quarterly basis.
“The regulations imposed by this process are significant and demanding, and stand to impact the industry greatly,” Newberry said. “Our committee will hear from banking leaders as they assess the impact these new rules will have on their respective institutions and their ability to lend.”