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Wednesday, October 24, 2012

Basel III to Exacerbate Funding for Iowa State Banks

Iowa Gov. Terry Branstad (R) and state Banking Superintendent James Schipper in a letter to the federal banking regulators said they’re concerned the Basel III proposals “could exacerbate funding challenges for local Iowa banks due to limited access to capital markets.”

Branstad and Schipper said there are about 300 Iowa state-chartered banks that will be affected. They explained that those banks rely on their officers, directors, and shareholders to raise additional capital, which is challenging even in good times and drives local accountability.
By requiring reporting and maintenance of granular loans by loan data, Iowa banks will face enormous time and cost compliance burdens. Many Iowa banks will have difficulty servicing their local communities because they simply do not have the resources or capacity to meet the new [Basel III] compliance obligations.
Read the Branstad/Schipper letter.

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