Lynn A. Stout, the Paul Hastings professor of corporate and securities law at U.C.L.A., is the author of "Cultivating Conscience: How Good Laws Make Good People."

Banking is a boring business. Most people would rather scrub out their bathtubs than read about the Basel III requirements for bank capitalization. This explains why banking executives like Jamie Dimon can say outrageously untrue things about banking (for example, that the Basel III capital requirements are “anti-American”) and hope most folks won't have a clue just how ridiculous such a statement is.

For all you readers who'd rather be scrubbing your bathtubs, here's the skinny on banking capital requirements: they help keep banks from failing. They accomplish this by limiting banks’ ability to use leverage (that is, borrowed money). Thanks to capital requirements, bank shareholders have to have at least some financial interest in the bank — some skin in the game — that they would lose if the bank went under. This means that bank shareholders (who get the profits when times are good) also have to suffer losses when times are bad. The result? More cautious banks that are less likely to make bad loans and investments and then fail, causing market disruptions and costly taxpayer bailouts.

Basel III may slightly reduce the wealth of bank shareholders and bank executives. But it helps American banks, and their customers, and the American economy.

Sounds sensible, right? Not if you're a bank shareholder — or a bank executive who gets a big chunk of his or her pay in the form of bank stock or stock options. Bank shareholders want capital requirements that are as low as possible so the bank can borrow as much as possible. That way, they enjoy all the profits when times are good, but have only limited losses if the bank goes under. The deal is even better if regulators never let the bank go under because it's “too big to fail.” Profits are privatized, losses socialized.

So Basel III may indeed slightly reduce the wealth of bank shareholders and bank executives. But it helps American banks — and their customers, and the American economy — by making American banks more stable and less likely to fail.

Once again, another Wall Street executive has shown himself unable to distinguish between “what's good for me” and “what's good for the country.” When bank shareholders and executives earn profits primarily by shifting risks onto customers and taxpayers, America loses.