The federal banking regulators released a Basel III calculator intended to help estimate the impact of the proposed new capital rules on banks. The regulators have stated the tool is intended to help institutions estimate the potential effect the proposals could have on capital ratios, but should not be relied on as an indicator of a bank’s actual regulatory capital ratios.
The calculator is useful as a starting point for bankers to consider the effect of the proposed rules on their banks and customers, but ABA cautions against overreliance on its results. The tool offers only a point-in-time and high-level overview of the capital requirements, does not consider the increased volatility resulting from the proposals, and has gaps in its securitization treatment.
The proposals’ actual impact is heavily dependent on technical new definitions, individual loan underwriting data, and changing market conditions.
Both the regulators’ calculator and ABA’s own securitization calculator are available on the ABA Basel III web page.
ABA urges bankers to comment on the Basel III proposals.