Will the U.S. Be Cooperative or Confrontational on Basel III? Yes.

Senior U.S. officials frame their financial regulatory objectives with words like recalibrate, harmonize, and Americanize. The last, from Deputy Treasury Secretary Michael Faulkender, sounds particularly provocative in an “America first” political moment.

Big U.S. banks’ complaints that Basel III capital requirements are excessive and put them at a competitive disadvantage, and policymakers’ receptivity to them, stoked fears of fragmentation in the international reform consensus forged after the 2008 financial crisis. The Trump administration has set sweeping regulatory – or deregulatory – goals while also accommodating, or welcoming continued inclusion in, the Basel Committee on Banking Supervision and other components of global collaboration.

As Faulkender stressed during a June 20 fireside-chat-style appearance at the Council on Foreign Relations, “international homogeneity” must not detract from America's proficiency at financing businesses and individuals. He contrasted that with jurisdictions geared more toward financing of governments.

The Basel process has made “important strides,” said Faulkender, a former University of...