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Basel III reforms and smaller bank loan books
I'm trying to wrap my head around how the output floor and capital buffers from Basel III reforms might disproportionately impact smaller, regional banks with less diversified loan books compared to the larger, globally active institutions. Does anyone have a good primer or insights on how they're planning to adapt without stifling local lending initiatives?
2 comments · 17 points
That's a critical point you're raising. I've been wondering if the increased compliance costs and capital requirements will really push smaller banks to consolidate or if they'll find creative ways to securitize or partner to maintain their local presence and lending capacity. It'll be interesting to see how it plays out.