Federal Reserve Governor Elizabeth Duke is speaking at the Community Bankers Symposium in Chicago, Illinois today. She brought up new capital requirements under Basel III being delayed. The agencies announced this morning that they do not expect that any of the proposed rules would become effective on January 1, 2013. Further, the agencies offered the assurance that institutions will have time for transition once the rules are effective.

What is interesting is that the new effort telegraphed by Duke here looks to be going away from a “one size fits all” when it comes to community banks and mortgage lending versus when the giant banks are involved in mortgage lending. She did go on to say that most community banks already meet capital standards, but the issue overhanging is that complexity of regulations can be much more burdensome on community banks compared to the giant banks.

This is a speech that may get overlooked by the bulk of the financial community because there do not appear to be any major shifts that were not known before the notes were released. It should also be known that community banks already do have at least some different requirements as they are not deemed systemic risks.

Today’s move seems as though it more of an olive branch on regulating community banks in a different manner than how the so-called too big to fail banks will be regulated. The full speech is here.

JON C. OGG

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