Federal regulators are not making it easy for large banks to opt into the Basel II risk-based capital regime, and the international capital standard still requires too much capital for commercial real state loans and home equity lines of credit, a SunTrust executive told a congressional panel June 22."Opt-in banks need additional guidance and assistance from regulators that is not readily available," SunTrust Banks executive vice president Sandra Jansky testified. She also complained that the Basel committee is proposing risk-based capital requirements for HELOCs that are higher than for unsecured credit card receivables. Bank of America Treasurer Joseph Dewhirst noted that the risks assigned to mortgage assets are "overstated" in Basel I. "Basel II is moving in the right direction," he said. Meanwhile, community bankers are urging federal regulators to revise the Basel I RBC rule so that small banks are not left at a competitive disadvantage when the largest banks adopt Basel II. As part of a revision, regulators should consider collateral values, loan-to-value ratios, credit scores, and credit enhancements such as mortgage insurance, according to Kathleen Marinangel, chairman and chief executive of McHenry (Ill.) Savings Bank. The current system requires banks to "carry more capital than needed," she said. Ms. Marinangel testified on behalf of America's Community Bankers.

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