US Charts Independent Regulatory Path, Fracturing Global Banking Accord

A major rift is opening in global financial regulation as the United States decisively pivots from the international Basel framework. This strategic shift marks a fundamental departure from the post-2008 crisis consensus and signals a new era of regulatory divergence driven by domestic economic priorities.The U. S.stance, characterized by delayed implementation of the final Basel III standards and a reassessment of capital requirements, creates a direct challenge to the unified global approach championed by European regulators. American officials contend their banking system, already the world's most capitalized, would be unfairly burdened by additional international rules that could stifle lending and economic growth.European counterparts, however, view any weakening of the Basel accords as dangerously reminiscent of pre-crisis vulnerabilities, fearing it invites future financial instability. This transatlantic split raises immediate concerns about regulatory arbitrage, where institutions might relocate high-risk activities to more lenient jurisdictions, potentially creating new systemic weak points.The fragmentation undermines the Basel Committee's authority and threatens to replace a coordinated defense against financial contagion with a patchwork of competing national standards. While U.S. regulators bet their domestic safeguards are sufficient, this unilateral move risks eroding international confidence and could leave global markets exposed to crises emerging from the gaps between disparate regulatory regimes.

#banking regulation

#Basel III

#financial crisis

#US policy

#global finance

#central banks

#featured