What will Basel III do?

Felix Salmon has one good summary, here a bit on community banks, overall emerging markets get off lightly, and Germany is unhappy (in this case probably a good thing).  A few points:

1. This agreement is probably good news.

2. It is difficult to divine the net future effects of such changes upon announcement.  There is also the question of how binding this ends up being and whether the implementation lags will matter.

3. One key question is how much current systems prevent regulatory arbitrage, namely driving more intermediation into less regulated, less reliable and less easily monitored institutions.

Stay tuned…