Federal regulators have reached a stalemate over next steps regarding the Basel III endgame proposal, Politico reported. The lack of consensus reflects the proposal's complexity and tensions between progressive regulators and regulators who are more sympathetic to industry.
With key players such as Fed Chair Jerome Powell pushing for a reproposal, the chances of finalizing Basel III before November are slim to none. The question now is what happens after the election. If former President Trump wins, the proposal likely won't survive in its current form, if at all. If Vice President Kamala Harris wins, she'll inherit the fight over it, and her appointees will presumably be inundated with questions about how they would move forward.
Meanwhile, the stalemate is a huge win for banks, particularly the largest banks that spared no expense to combat the plan. To what extent would you attribute the stalemate to the industry's lobbying blitz and public-pressure campaign against Basel? Can banks afford to do this with future proposals? If so, are we at an inflection point for regulation in the industry-or is that too much of a stretch?
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Rob Blackwell
Chief Content Officer and Head of External Affairs
IntraFi
Arlington, VA
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