WALL STREET’s most powerful bankers told the Senate Banking Committee last week that proposed new rules known as the “Basel III endgame” would hurt average Americans. JPMorgan Chase & Co. CEO Jamie Dimon warned that by demanding banks expand their capital cushions, the regulations would raise the costs of “your local affordable housing, or the Montana pension plan.”

While that may very well be true, at least those Montana pensioners have people in the Senate supposedly looking out for their interests. The bigger problem with the way countries are implementing Basel III regulations is that nobody’s looking out for the interests of borrowers outside their own borders. That hurts everyone — borrowers, lenders, and even the planet.

Back before the financial crisis, developed-world banks played a central role in financing the growth of emerging economies. In 2006, for example, Indian companies and households borrowed almost as much from foreign banks as they did from domestic institutions.

Crucially, foreign banks often contributed more than domestic institutions to financing long-term, growth-enhancing infrastructure projects. Sometimes as much as a third of external borrowing in India supported the infrastructure sector.

In recent years, as various Basel III rules have been introduced around the world, that lending has begun to dry up. When banks were told that they needed to fund long-term, illiquid lending with more secure, higher-cost assets, they cut down sharply on the longer-duration loans essential for infrastructure projects. Few stayed interested in loan tenors of 15 years, and even tenors of five to seven years received far fewer takers.

The rich world may not have noticed because, of course, public spending on domestic infrastructure in Europe and the US has vastly increased in recent years. But emerging markets certainly have. Cross-border syndicated loans to developing countries — often used as a way to get foreign bankers into projects in emerging economies — fell as a proportion of the total from almost 90% in the 2000s to just over half by 2014.

New ways of weighting the risk attached to various assets — such as those the Basel III endgame proposes to implement for US banks — threaten to penalize the poorest countries the most. One study by the G20’s Global Infrastructure Hub found that if banks used actual historical data instead of the new mechanisms, it might make a 37% difference in how they evaluated their possible losses from loans to infrastructure in developing countries, but only 11% in loans to high-income ones.

Shouldn’t we in the emerging world be tapping the bond market instead of banks to fund infrastructure? Such advice is perfectly reasonable — and, given realities on the ground, absolutely useless. The regulatory and financial capacity that would be required is beyond most developing countries. Meanwhile, everyone has banks and banking regulators.

In any case, fast-growing emerging markets have governments that need to borrow more and thereby take up all the oxygen that would otherwise have kept a non-government bond market alive. That’s why bank loans have remained the primary financing instrument for infrastructure in emerging economies, even if fewer foreign banks are in the mix.

Why should it matter if the developing world has to rely on its own scarce resources to build the trillions of dollars of infrastructure it needs? Is there any reason the Senate Banking Committee, say, should care?

Well, yes. In the 2000s, banks could lend to infrastructure abroad at margins of 50 basis points; that rose by 2016 to 250 to 300 basis points. When you add this much friction, bankers stop looking for the best projects, only the safest ones — and lazy banking means that savers earn less.

US senators — and regulators in Brussels, as well — should ask themselves how many remunerative projects their financial sectors will lose out on in the post-Basel III era, and what that means for the savings of their aging citizens. Are regulators punishing banks for the financial crisis, or are they punishing pensioners?

If both borrowers in the developing world and savers in the West are hurt by the mindless application of Basel III principles, so is the fight against climate change. Green infrastructure — such as solar energy — has particularly high initial costs. Without more long-term lending across borders, countries in the Global South are not going to be able to afford the infrastructure they need to mitigate carbon emissions and adapt to climate change.

Policymakers should consider how endless restrictions aimed at preventing a future financial crisis are worsening a climate crisis that threatens devastating impacts now. Their zeal for a safer banking sector may be fueling risks that are far harder to contain.

BLOOMBERG OPINION