The Federal Reserve's June 12 proposal of rules implementing
Basel III was praised as a crucial step towards a harmonised
global capital framework. But the rules create a dubious future
for US banks regarding Tier 1 contingent convertible capital
(Cocos), a battle on risk weightings, and capital raising
problems for small banks.
The announcement came almost 18 months after the Basel III
framework was finalised and almost a year after the European
Commission (EC) released its own implementing package
– the Capital Requirements Directive IV (CRD VI).
US implementation of Basel III was expected as early as a
year ago, and a month before the Fed's announcement a number of
New York partners expressed concern that the latest accord
would suffer a similar fate to Basel II, which was never fully
implemented in the country. But last month's release was
welcomed by US attorneys for reasons beyond principle; largely