Basel III rules published - White & Case

Concluding remarks
In this publication, White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership,
White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.
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The aim of the Basel III capital and liquidity standards is to make banks more resilient. However, Basel III also imposes costs on banks,
reducing the returns that they can earn on their assets and increasing their cost of capital. It is to be expected that banks will seek to
pass these costs on to their customers to the extent possible.
The capital structure of many financial institutions looks set to change as a result of Basel III. Some banks have already embarked on
core capital raising exercises which have helped to secure their capital adequacy ratios. It seems quite possible that more will follow.
Alternative or additional ways to meet the Basel III standards include retention of earnings or the reduction of risk-weighted assets
through sales and/or a shift in the kinds of business undertaken by an institution.
Banks face some uncertainty about how Basel III will be implemented across countries. National authorities may have some discretion as
to how widely they apply the Basel III requirements and are also required to exercise judgement when determining the level of the
countercyclical buffer to be held by banks in different circumstances. National authorities may impose more stringent capital and liquidity
standards than prescribed by Basel III.
In the European Union, Basel III will be implemented as part of a set of amendments to the Capital Requirements Directive (CRD) referred to
as CRD IV (with the exception of the trading book and securitisation reforms covered already by earlier CRD amendments). The draft
legislation for CRD IV is due to be published in the latter part of this year. Difficulties may emerge if particular countries delay implementation,
as can happen with the adoption of international standards.
Attorney advertising, prior results do not guarantee a similar outcome.