Federal Reserve Board Director David Bowman said on Wednesday that the controversial proposed increase in capital requirements for major banks would require “substantial changes” and that the U.S. central bank would not accept any amendments. He pointed out that he should seek comment on the matter. These moves may delay the final decision on the proposal.
Bowman said he is “cautiously optimistic” that Fed officials will work toward a compromise that will gain broad support for the plan, which is being led by Fed Vice Chairman Barr, who is responsible for banking supervision.Fed Director Waller also said on the 16th that the current plan requires a “major fundamental review” and thatreturn to blankHe said that may be necessary. Last year, both board members voted against releasing the current version for public comment.
Bowman, director of the U.S. Chamber of Commerce in Washington, said that given the significant backlash the proposal has received from a variety of stakeholders, “agencies have an obligation to think carefully about the best path forward.” .
Last July, regulators announced plans to require major financial institutions to increase their capital by 19%, with the aim of preventing future bank failures and a recurrence of the financial crisis.
Bowman Fed Director
Photographer: Andrew Harrer/Bloomberg
Since then, regulators have come under the most intense pressure from Wall Street. Banks argue that the current proposal overestimates the capital cushion that financial institutions will need, making them less competitive and making it harder to access housing and corporate loans. Supporters, however, point out that the proposal draws on lessons learned from the 2008 financial crisis and the 2023 regional bank failure.
Bowman criticized the current plan’s capital levels as “over-calibration.” Significant increases in capital requirements “could cause significant harm to the U.S. economy through business impacts, while failing to achieve our goals for improving safety and soundness and promoting financial stability.” Ta.
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Original title:Bowman Says Fed’s Bank Capital Proposal Needs Big Changes (2)(excerpt)
2024-01-17 22:48:00
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