It’s not surprising when economists disagree, but the gulf that opened this week on the macroeconomic impact of Basel III is a chasm. On the one hand, the Institute of International Finance (IIF) found that millions of jobs and billions in public funds are the cost of over-speedy implementation of the capital and liquidity rules. On the other side stands the mighty fortress of the Bank for International Settlements (BIS), which deployed teams of economists and reams of models to find nothing more than a “modest” impact on gross domestic product in affected nations. Finance ministers in Korea last week stood firm with the BIS, pushing up the date for final rules. Finance ministers did, though, allow a bit of flexibility on timing, and this now is the bankers’ best hope for a soft landing.

The IIF found that GDP in the U.S., EU and Japan would drop by three percentage points by 2015 if the rules go forth as proposed and into effect immediately. This results because of the huge price-tag calculated for the capital and liquidity rules: $700 billion in new common equity and an astounding $5.4 trillion in new long-term debt. These numbers may or may not be right, but their magnitude surely confirms our longstanding view that the Basel III capital rules are costly and the liquidity ones – often overlooked – are a sea change for the industry.

In the other corner, though, stands the BIS. A senior officer earlier this week for the first time announced the results of the calibration exercise undertaken in tandem with the capital and liquidity proposals to see how much regulators think they would cost. The result, as noted, was a finding of only “modest” GDP impact. The head of the Basel Committee has previously said his team has found only a 0.5 to one percentage point negative Basel impact on GDP. Both officials also point to several offsetting benefits. These include a drop in GDP volatility because of reduced procyclicality, fewer crises and lower risk premiums. A more qualitative benefit, BIS argues, is the role Basel III will play in harmonizing global financial regulation and economic systems. In remarks

Friday, the head of the Basel Committee also pointed to the trillions of public dollars spent to rescue the financial system and local economies as another cost that tough rules will cure.

But, while giving no ground to bankers on the big points in the Basel proposals, the decision-makers are showing a bit of sympathy to the short-term impact of implementing their hard stand too fast. The Basel Committee leader Friday said that implementation will look towards earnings retention and “reasonable” capital hikes to meet the new standards, even as he emphasized that they will not be watered down. All he would say about the liquidity rules is that the transition will be “orderly,” little comfort to bankers but at least a glimmer of hope on that front.

Or, it would be in the U.S. if it weren’t for the pending Collins amendment. So far, it’s still in the base text before the reform conference committee. All Sen. Collins has said so far is that she’s open to changes to help community bankers, even as FDIC Chair Bair stands pat on her initial proposal to whack the daylights out of big bank capital and do it now. The FDIC’s stand isn’t all that different from the BIS’s, but her timetable sure is. As a result, the global system might get a bit of a cushion through phased-in implementation of tough rules, but U.S. banks could still find their backs against a very expensive wall.

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