As with any regulations, the ultimate impact of Basel III will depend upon how it is implemented in the future. International financial markets depend on a variety of factors, with financial regulation being a large component. For example, it is likely that increased bank regulation will ultimately be a positive for bond market investors due to higher capital requirements (bonds issued by banks are safer investments) and a greater financial system stability will provide a solid ground for bond investors (even for on economic slowdowns).
Marcfields - Capital Management 