October 23, 2012 - America's smallest banks should be made exempt from the full Basel III regulatory changes, a leading figure in the industry has recommended.

Benjamin Lawsky, head of the New York State Department of Financial Services, has today (23 October) written to US bank regulators to express his belief that financiers with less then $10 billion in assets should not have to comply with the full capital ration requirements put forward in these reforms.

Under the terms of Basel III - which has been designed to strengthen banks' balance sheets to avoid any repeat of the financial crisis - lenders will be required to hold a core ration of ten per cent of their assets.

However, Mr Lawsky has insisted such controls would serve only to impose an undue burden on community banks, which are finding conditions tough as global financial issues rumble on.

"Implementing the proposals as they stand now would place regional and community banks at a further competitive disadvantage, with potential ripple effects on the local markets, small businesses and consumers," Bloomberg quoted the official as writing.