Dodd-Frank provision interferes with a Basel III requirement

09/24/2010 | Bloomberg

The Dodd-Frank act requires U.S. regulators to remove from their rules any references to credit ratings of securities. The Basel Committee on Banking Supervision's revised standards on the amount of capital banks must hold against securities on their trading books depend on credit ratings. Therefore, to implement the rules, the U.S. must develop another credit rating mechanism, a process that likely will delay adoption of Basel III.

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