In a recent article published in the ABA Banking Journal, the American Bankers Association's Hugh Carney argues that the "Basel Endgame" process in the US has revealed the need for more transparency and inclusivity in international standard-setting.
The Basel Endgame proposal, which aims to strengthen bank resilience through increased capital requirements, faced criticism from diverse sectors concerned about its economic impact before regulators scaled it back significantly in September last year. Agricultural groups warned of disruptions to hedging and rising food costs. Small businesses feared reduced credit availability and higher borrowing costs. Social justice organizations highlighted risks to affordable housing. And utility companies anticipated increased expenses for essential services. "The breadth of the [feedback] raises a crucial question: Why weren't these voices heard earlier?" Carney writes.
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