Central ND News

WASHINGTON – Two letters have been sent to regulators calling for the withdrawal of the Basel III Endgame proposal, citing concerns over its impact on derivatives end users. U.S. Senator Kevin Cramer (R-ND) joined both letters, expressing apprehensions about the proposal's effect on the economy and the banking system.

The first letter, led by U.S. Senator Jerry Moran (R-KS), urges regulators to consider the consequences of the Basel III Endgame proposal on the derivatives market and commodities producers, particularly in the agriculture industry. The letter emphasizes the role of futures and derivatives markets in stabilizing prices and minimizing risk for end-users. It states, "This will inevitably put end-users seeking to hedge and manage risk on an uneven playing field with competitors in other jurisdictions."

The letter is endorsed by various organizations, including the Farm Bureau Foundation, National Grain and Feed Association, National Milk Producers Federation, and Futures Industry Association, among others.

The second letter, led by U.S. Senator Tim Scott (R-SC), also requests the withdrawal of the Basel III Proposal. Senator Cramer joined his colleagues in emphasizing the adverse impacts the proposal would have on the U.S. economy, from everyday consumers to small businesses. The letter states, "your agencies have still yet to justify the need for this proposal with any sufficient economic analysis or proof that the banking system is currently undercapitalized."

Both letters call for a reconsideration of the Basel III Endgame proposal and urge the regulators to operate in a more transparent and justified manner.

Senator Cramer has been actively voicing his concerns about the Basel III Endgame proposal. In December 2023, he joined two letters expressing concerns about the impact of proposed capital requirements on mortgage loans and the operational risk portion of the rule. He also discussed the restrictive nature of the Basel III Endgame proposal on Fox Business' "Mornings with Maria."

The Basel III Endgame proposal was created in response to the financial crisis from 2007 to 2009. While it aims to set standards for capital reserves, liquidity, and leverage at financial institutions, there are growing concerns about its potential negative effects on derivatives end users and access to credit for consumers.

As the public comment period for the proposal comes to a close, the pressure on regulators to withdraw the Basel III Endgame proposal continues to mount.