Class Twelve -- October 3, 2014

Today we will focus our attention on the Basel III reforms and their implementation in the United States. The materials on regulatory developments are arranged chronologically and explore a number of developments: • DavisPolk, Client Memorandum on Collins Amendment (June 28, 2010) (noting amendment to pending Dodd-Frank Act) • Douglas J. Elliot, Basel III, the Banks and the Economy (July 23, 2010) (memorandum previewing Basel III proposals released shortly thereafter) • Press Release of the Basel Committee on Banking Supervision (Sept. 12, 2010) (announcing new Basel III global minimum capital standards and transition rules) • BIS Statement on article on G-SIBs (June 25, 2011) (announcement of consultative document on global systemically important banks with additional capital surcharges) • FSB Designation of G-SIBs (Nov. 2012) (designating and stratifying banks of global systemic importance). • Cleary Gottlieb, Alert Memorandum: Final Capital Rules Adopted (July 10, 2013) (a lengthy summary of rules adopted as of mid-2013l; skim only) • DavisPolk Memo on Supplemental Leverage Requirements (July 2013) • CCMR Letter on Supplemental Leverage (June 2014). As capital standards have been reformed in recent years, one recurring debate has been over whether these increases in capital requirements are imposing excessive costs on financial firms. The following readings give a flavor of that discussion: • Amati Testimony of 29 November 2012. • Elliot, Higher Capital Would Come at a Price (Feb. 2013) A further question concerns the degree of complexity in modern capital regulation: • Haldane, The Dog and Frisbee (Aug 2012)