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Oklahoma delegation: Basel III will hurt state's banks

The members of Oklahoma's congressional delegation last week told the federal banking regulators that they're concerned about the Basel III proposals developed for large global banks being imposed on institutions of all sizes, including small community banks in their home state's rural areas.

The Basel III proposals' “change in the definition of capital and the increase in the risk weights of many asset classes will squeeze banks even as their broader regulatory burdens are increasing,” the lawmakers said in a letter.

“Many banks will simply stop making loans in certain lending areas because of the new risk-weighting requirements being imposed by your regulations,” they said. “This is to the detriment of Oklahoma banks and the communities they serve.”

The lawmakers also asked the regulators to answer several questions, including how they measured the Basel III proposals' impact on small banks, why the proposals are being assessed on small institutions in the same way as large ones, and whether the Federal Reserve intends to exempt smaller banks from the proposals. Read the letter.

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