US Charts Independent Regulatory Course, Fracturing Post-Crisis Global Banking Accord

A significant rupture is emerging in global financial regulation as the United States deliberately distances itself from the international Basel framework. This strategic shift marks a departure from the coordinated approach that defined the post-2008 crisis era, signaling a new chapter where national priorities may override global consensus.The U. S.position reflects a calculated reassessment of financial risk management, influenced by substantial domestic banking industry advocacy and a prevailing view that current American capital requirements are already sufficiently robust. This divergence is most evident in the softened implementation of existing rules and the resistance to adopting the more rigorous Basel III 'endgame' standards.European regulators, whose caution remains shaped by memories of systemic bank failures and government rescues, view this transatlantic split with alarm. They contend that diluting the global regulatory framework invites renewed financial instability.Meanwhile, U. S.officials maintain that their banking system—already among the world's most capitalized—would be unnecessarily burdened by additional international mandates, potentially restricting credit availability and economic growth. This regulatory schism creates immediate dangers, including the potential for regulatory arbitrage where institutions might relocate higher-risk operations to more lenient jurisdictions.The emerging fragmented landscape challenges the Basel Committee's influence and threatens to undermine market confidence in a uniform global system. The long-term implications are substantial: the very cooperation needed to prevent future financial crises is being tested, raising the unsettling possibility that the next systemic threat could originate in the gaps between these competing regulatory philosophies.

#banking regulation

#Basel III

#financial crisis

#US policy

#global finance

#central banks

#featured