Although it has become apparent that some countries are having difficulties sticking to the timetable, I urge all authorities involved to implement the framework as internationally agreed. Recently, there has been a somewhat disconcerting discussion about the perceived shortcomings of Basel III. Some argue that it is not enough. Others argue that it is too complex. Yet, neither of these criticisms is convincing.
First, one clear lesson from the crisis is that banks’ risk absorbing capacity was way too low. Therefore, Basel III substantially raises capital requirements, reducing the probability of bank failures and the associated risks to financial stability and to taxpayers. Second, while risk measurement will never be perfect, simplicity can sometimes come at a cost, too.