Michael S. Barr, Vice Chairman of the Federal Reserve Board for Supervision, speaks on “Recent bank failures and federal Supervisory Response” testified.
Evelyn Hochstein | Reuters
A senior Federal Reserve official on Tuesday unveiled changes to proposed U.S. banking regulations that would roughly cut in half the extra capital the largest institutions are forced to hold.
Dubbed the “Basel Finale,” the regulatory reforms, introduced in July 2023, will increase capital requirements for the world’s largest banks by about 19%.
Instead, officials from the Fed, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have agreed to resubmit a massive proposal to increase the capital of large banks by 9%, according to prepared remarks by the Fed vice chairman.
“This process has led us to conclude that broad and substantive changes to the proposal are necessary,” Barr said in his speech. “Increasing capital requirements has both benefits and costs. Based on the feedback we have received, we intend to make “The changes will better balance these two important goals.”
The original proposal was a long-gestating one reply After the 2008 global financial crisis, China sought to improve regulatory accuracy and consistency and strengthen oversight of risky activities including lending and trading. But by raising the amount of capital banks need to hold to cushion losses, the plan could also make loans more expensive or harder to obtain, pushing more activity to non-bank providers, according to the trade group.
An early version prompted an outcry from industry executives, including JPMorgan Chase Chief Executive Jamie Dimon has helped lead the industry effort to counter these demands. It now appears that these efforts have paid off.
This story is developing. Please check back for updates.
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