The implementation of Basel III will lead to a collapse of the developing world’s entire banking system as this new requirement has no meaning whatsoever, according to a senior banker and a seasoned businessman.
“The Basel Committee on Banking Supervision which revised the standards governing the capital adequacy of internationally active banks known as Basel III will put the 3rd world’s entire banking system under a tight jacket and virtually leading to a collapse of the system,” Ithmaar Bank Chairman, His Royal Highness Prince Amr Al Faisal, who chaired the bank’s annual general assembly on Sunday in Manama, warned.
“Those regulators who have been sleeping on the wheels are responsible for the financial turmoil and had never been punished and to me the implementation of Basel III is locking the stable door after the horse is stolen,” referring to the financial crisis HRH Prince Amr, said.
Basel III is required by the BIS to be implemented by the regulators by the year-end and the GCC banks, like regional peers, are working hard to find a breathing space to implement the uncalled for BIS requirement.
“This myopic view to implement the Basel III in this part of the world, to punish the entire world for the mistakes of few developed nations, will virtually choke the entire banking system and I am sure that Basel III will be abandoned,” HRH said.
Highlighting the negative impact of the Basel III he said that most of the banks, especially, in the developing world can’t afford the implementation but if the same will be required by the regulators they will be left with no choice. “The third world has its own issues to be addressed like poverty, unemployment and such new requirements will put the entire system on disarray.” HRH Prince Amr added.