WASHINGTON - Two leading financial industry associations, the International Swaps and Derivatives Association (ISDA) and the Securities Industry and Financial Markets Association (SIFMA), have voiced significant concerns over the proposed Basel III Endgame rules. In their feedback to U.S. regulators, submitted today, the groups highlighted the potential for a 129% increase in risk-weighted assets for eight major U.S. banks, which they believe could lead to destabilization of U.S. capital markets.
The associations are particularly concerned about the implications of the new capital requirements on the trading book regulations. They argue that these requirements, as currently proposed, could have unintended negative consequences on market liquidity and the broader financial system. Consequently, ISDA and SIFMA are calling for revisions to the Basel III Endgame rules to mitigate the risk of adverse effects on the markets.
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