By Katie Llanos-Small
BASEL III: New order
Incoming global bank regulations offer Latin America’s lenders a new to look at their capital base. Yet most have little short-term need to their models
When Santander Brasil unveiled plans to increase profits under
Basel III by reducing its cost of capital, the message from the
stock market was clear. The bank's shares, already recovering
from an early-summer sell-off, leapt on the day of the
announcement, rising from 6.55 reais to 7 reais each. Over the
next weeks, they tracked higher still.
Banks across Latin America - and particularly in Argentina,
Brazil and Mexico - have been preparing for Basel III for as
long as regulators have been discussing it. But Santander
Brasil's move was a particularly loud signal of plans to
Only three Latin countries have formally signed up to the
Basel framework: Argentina, Brazil and Mexico. All three have
already brought the new bank capital rules into force, although
the full strength of the requirements is being phased in until
2019. Other regulators across the region, including in
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