American athletes continue to compete for the Olympics in Paris, showcasing the competitive spirit of the United States on the world stage. That spirit also extends to the U.S.-based companies that look to compete in the global marketplace, which requires a level playing field with companies based in other countries.

A proposed rule garnering attention for its potential to create an inconsistent set of rules is the Basel III Endgame. Federal Reserve Chair Powell reiterated this month that "broad and material changes" will be made to the Basel III Endgame proposal. As Chair Powell noted, it's important to be "consistent" with what other countries are doing.

• Powell states that the Basel III Endgame revised proposal will be consistent with what other comparable large jurisdictions are doing. "So we're committed to finalizing this proposal. Our banks are going to live with these rules for a long, long time. The main thing is to get it right and that's what we're doing. What we do in the end will be consistent with the Basel Agreement and it will also be consistent with what other comparable large jurisdictions are doing."

• Consulting firm PwC finds that Basel III Endgame would raise costs for American banks in ways that would not apply to foreign competitors. "Differences between the U.S. proposal and adoption of the Basel Framework in other jurisdictions could result in different capital treatment for similar risks across global banks. The NPR’s requirements would raise costs for U.S. banks in ways that would not apply to foreign competitors for the same transactions. This outcome would undermine the goal of having globally consistent capital requirements and create a misalignment of risk, whereby capital requirements for the same risks would differ by jurisdiction."
• A study by Oliver Wyman found that the proposal would significantly benefit European banks relative to U.S. banks, stating that there is a potential for $35 billion in U.S. bank revenues to be captured by other providers, including non-U.S. banks. "There is a potential for $35 billion in US bank revenues to be captured by other providers — a sum equal to 15% of the combined Americas wholesale banking revenue pool and US wholesale banks' overseas revenues. We expect about half would go to non-US banks, particularly European banks given their existing scale and capabilities. The other half of the value migration will accrue to non-bank financial institutions (NBFIs) such as private credit funds and non-bank liquidity providers."

As regulators re-evaluate Basel III Endgame, it is critical that they do not put America at a disadvantage. Basel III Endgame will make U.S. less competitive