The Washington Post editorial board wrote an editorial on Basel III Endgame this week, arguing that the proposal looks to solve the problems of the past while not taking into account new types of risks posed by the shadow banking sector.

Here is what they said:

• As proposed, Basel III Endgame looks backward, not forward: "The financial world has changed dramatically in the past 15 years, but the Basel III Endgame looks backward to problems like those that precipitated the 2008 crisis instead of focusing forward to new sources of risk."
• The proposal does "nothing" to address risk in the shadow banking sector: "Whereas regulators meet frequently with bank leaders and perform annual stress tests on large banks, which gives regulators a pretty good understanding of where the pitfalls and risks are, there’s far less transparency in the non-bank sector. Hence its nickname, 'shadow banking.' This month, the International Monetary Fund warned that shadow banks could see 'large, unexpected losses in a downturn.' The Basel III Endgame does essentially nothing to address that risk."
• Basel III Endgame doesn't fix the problem it purports to resolve: "A brand-new form of financial crisis seems likelier than a repeat of the last one. In that sense, Basel III Endgame's main shortcoming is failure of imagination."

The editorial board joins the growing list of bipartisan voices raising concerns about this proposal. It's time for regulators to scrap Basel III Endgame and start over.