There are two essential conditions for this: offsetting the new local taxes with cuts in central government taxes, not summing them; and providing for strict monitoring to ensure legal conduct on the part of the bodies accountable, under decentralization, for spending.
They have argued that simpler capital rules are needed to reduce the compliance burden for smaller institutions because it is disproportionate to the benefits of the framework’s increased risk sensitivity. The greater detail of the Basel III framework requires a degree of categorization, recordkeeping, and reporting that can be particularly costly for smaller community banks.