Fed governor Michelle W. Bowman on Wednesday struck a hopeful tone about middle ground regarding a controversial proposal to boost capital requirements for banks, a day after the comment period on the regulations ended with a flurry of industry input. “I am cautiously optimistic that policy makers can work toward a reasonable compromise,” Bowman said in a speech at the U.S. Chamber of Commerce in Washington, D.C.
Policy makers should modify the proposal’s shortcomings, including its higher capital requirements. In its current form, the capital requirements, also known as the Basel III endgame, would exceed agreed-upon international standards, she said. “Increasing capital requirements as initially proposed could result in significant harm to the U.S. economy through the impact on U.S. businesses, while failing to achieve the intended goals of improving safety and soundness and promoting financial stability,” she said. Regulators could also do more to tailor the capital requirements to banks based on size, she said, rather than the current proposal to have a broad set of rules kick in once banks reach $100 billion in assets. “Bank capital policy involves tradeoffs and policy decisions, and as you all know, policy makers have different views about how to strike the right balance,” Bowman said. …
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Policy makers should modify the proposal’s shortcomings, including its higher capital requirements. In its current form, the capital requirements, also known as the Basel III endgame, would exceed agreed-upon international standards, she said. “Increasing capital requirements as initially proposed could result in significant harm to the U.S. economy through the impact on U.S. businesses, while failing to achieve the intended goals of improving safety and soundness and promoting financial stability,” she said. Regulators could also do more to tailor the capital requirements to banks based on size, she said, rather than the current proposal to have a broad set of rules kick in once banks reach $100 billion in assets. “Bank capital policy involves tradeoffs and policy decisions, and as you all know, policy makers have different views about how to strike the right balance,” Bowman said. …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]