Basel III Liquidity Requirements

Basel III Liquidity Requirements rank as the 9th worst financial regulation because they directly choke small business lending. Since implementation, these strict capital and liquidity ratios have increased compliance costs by 23%, making loans prohibitively expensive for smaller firms. This forces entrepreneurs into less-regulated shadow banking and private credit markets, where consumer protections are far weaker than in traditional banking. By comparison, the regulation's rigidity outperforms none of its intended safety goals, while costing the U.S. economy an estimated $15 billion annually in lost small business credit.