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Critics,\u00a0meanwhile,\u00a0say\u00a0\u200bbanks\u00a0are\u00a0flush\u00a0with\u00a0cash\u00a0and\u00a0that\u00a0the\u00a0\u200cchanges\u00a0will\u00a0weaken\u00a0critical\u00a0rules\u00a0introduced\u00a0as\u00a0a\u00a0result\u00a0of\u00a0the\u00a02007-09\u00a0crisis\u00a0at\u00a0a\u00a0time\u00a0when\u00a0geopolitical\u00a0\u200cshocks\u00a0sparked\u00a0by\u00a0the\u00a0Iran\u00a0conflict\u00a0and\u00a0deteriorating\u00a0private\u00a0credit\u00a0conditions\u00a0are\u00a0\u200crattling\u00a0markets.\u00a0The\u00a0new\u00a0draft,\u00a0combined\u00a0with\u00a0changes\u00a0to\u00a0other\u00a0\u200ccapital\u00a0rules,\u00a0will\u00a0modestly\u00a0reduce\u00a0capital\u00a0requirements\u00a0for\u00a0many\u00a0lenders,\u00a0Federal\u00a0Reserve\u00a0Vice\u00a0Chair\u00a0for\u00a0Supervision\u00a0Michelle\u00a0Bowman\u00a0said\u00a0earlier\u00a0this\u00a0week.<\/p>\n
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\u00a0<\/p>\n
The\u00a0committee\u2019s\u00a0\u201cBasel\u00a0III\u201d\u00a0standard\u00a0was\u00a0agreed\u00a0after\u00a0the\u00a02007-09\u00a0global\u00a0financial\u00a0crisis.\u00a0It\u00a0includes\u00a0numerous\u00a0capital,\u00a0leverage\u00a0and\u00a0liquidity\u00a0requirements\u00a0for\u00a0banks.\u00a0Regulators\u00a0across\u00a0the\u00a0world\u00a0have\u00a0worked\u00a0for\u00a0years\u00a0to\u00a0implement\u00a0many\u00a0of\u00a0those\u00a0standards,\u00a0and\u00a0the\u00a0so-called\u00a0\u201cendgame,\u201d\u00a0agreed\u00a0in\u00a02017,\u00a0is\u00a0the\u00a0final\u00a0iteration.<\/p>\n
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The\u00a0Fed\u00a0is\u00a0leading\u00a0the\u00a0project\u00a0in\u00a0the\u00a0United\u00a0States,\u00a0along\u00a0with\u00a0the\u00a0Federal\u00a0Deposit\u00a0Insurance\u00a0Corporation\u00a0and\u00a0Office\u00a0of\u00a0the\u00a0Comptroller\u00a0of\u00a0the\u00a0Currency.<\/p>\n
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The\u00a0original\u00a02023\u00a0Basel\u00a0draft\u00a0led\u00a0by\u00a0Bowman\u2019s\u00a0Democratic\u00a0predecessor\u00a0Michael\u00a0Barr\u00a0proposed\u00a0raising\u00a0capital\u00a0by\u00a016%.\u00a0Big\u00a0banks\u00a0said\u00a0it\u00a0could\u00a0hike\u00a0their\u00a0levels\u00a0by\u00a0as\u00a0much\u00a0as\u00a020%.\u00a0That\u00a0came\u00a0as\u00a0a\u00a0shock\u00a0to\u00a0the\u00a0industry,\u00a0which\u00a0had\u00a0expected\u00a0the\u00a0rule\u00a0would\u00a0shift\u00a0capital\u00a0around\u00a0but\u00a0\u200ckeep\u00a0overall\u00a0levels\u00a0mostly\u00a0flat.<\/p>\n
\u00a0<\/p>\n
In\u00a0response,\u00a0banks\u00a0launched\u00a0an\u00a0unprecedented\u00a0lobbying\u00a0effort\u00a0and\u00a0\u200bpublic\u00a0campaign\u00a0–\u00a0which\u00a0included\u00a0running\u00a0attack\u00a0adverts\u00a0during\u00a0football\u00a0games\u00a0–\u00a0arguing\u00a0the\u00a0rules\u00a0were\u00a0unnecessary\u00a0because\u00a0banks\u00a0were\u00a0already\u00a0\u200bwell-capitalized,\u00a0and\u00a0that\u00a0they\u00a0would\u00a0hurt\u00a0lending,\u00a0small\u00a0businesses\u00a0and\u00a0the\u00a0economy.\u00a0Banks\u00a0also\u00a0threatened\u00a0to\u00a0sue.\u00a0Barr\u00a0pledged\u00a0to\u00a0rewrite\u00a0the\u00a0rule,\u00a0but\u00a0the\u00a0three\u00a0regulators\u00a0could\u00a0not\u00a0agree\u00a0a\u00a0path\u00a0forward,\u00a0and\u00a0the\u00a0effort\u00a0slipped\u00a0into\u00a0the\u00a0Trump\u00a0administration,\u00a0which\u00a0has\u00a0generally\u00a0sided\u00a0with\u00a0the\u00a0industry.<\/p>\n
\u00a0<\/p>\n
The\u00a0US\u00a0proposal\u00a0would\u00a0overhaul\u00a0how\u00a0large\u00a0banks\u00a0gauge\u00a0their\u00a0risk,\u00a0and\u00a0in\u00a0turn,\u00a0how\u00a0much\u00a0capital\u00a0they\u00a0should\u00a0set\u00a0aside\u00a0as\u00a0a\u00a0cushion\u00a0against\u00a0potential\u00a0losses.\u00a0The\u00a0main\u00a0areas\u00a0of\u00a0focus\u00a0are\u00a0credit\u00a0risk,\u00a0market\u00a0risk\u00a0and\u00a0operational\u00a0risk.\u00a0On\u00a0Thursday,\u00a0Bowman\u00a0said\u00a0the\u00a0new\u00a0proposal\u00a0would\u00a0\u201cright-size\u201d\u00a0requirements\u00a0to\u00a0better\u00a0capture\u00a0risks,\u00a0while\u00a0minimizing\u00a0overlaps.\u00a0The\u00a0changes\u00a0would\u00a0also\u00a0give\u00a0banks\u00a0relief\u00a0for\u00a0activities\u00a0regulators\u00a0see\u00a0as\u00a0less\u00a0risky\u00a0and\u00a0which\u00a0they\u00a0want\u00a0to\u00a0promote,\u00a0such\u00a0as\u00a0mortgage\u00a0lending.<\/p>\n
\u00a0<\/p>\n
For\u00a0smaller\u00a0banks,\u00a0the\u00a0plan\u00a0would\u00a0create\u00a0a\u00a0new\u00a0standardized\u00a0measurement\u00a0of\u00a0risk\u00a0which\u00a0would\u00a0\u201cmoderately\u00a0reduce\u201d\u00a0their\u00a0requirements\u00a0and\u00a0\u200cincentivize\u00a0lending.\u00a0Overall,\u00a0Basel\u00a0is\u00a0still\u00a0expected\u00a0to\u00a0raise\u00a0\u200ccapital\u00a0slightly\u00a0for\u00a0the\u00a0largest,\u00a0riskiest\u00a0banks.\u00a0But\u00a0when\u00a0combined\u00a0with\u00a0changes\u00a0to\u00a0a\u00a0surcharge\u00a0levied\u00a0on\u00a0risky\u00a0global\u00a0or\u00a0\u201cGSIB\u201d\u00a0US\u00a0banks,\u00a0capital\u00a0at\u00a0the\u00a0biggest\u00a0Wall\u00a0Street\u00a0banks\u00a0would\u00a0shrink\u00a0\u201ca\u00a0small\u00a0amount,\u201d\u00a0she\u00a0said.<\/p>\n
\u00a0<\/p>\n
The\u00a0GSIB\u00a0surcharge\u00a0requires\u00a0eight\u00a0big\u00a0US\u00a0banks\u00a0deemed\u00a0to\u00a0be\u00a0globally\u00a0risky\u00a0to\u00a0hold\u00a0even\u00a0more\u00a0capital.\u00a0Those\u00a0big\u00a0banks\u00a0have\u00a0argued\u00a0for\u00a0years\u00a0the\u00a0surcharge\u00a0calculation\u00a0needs\u00a0to\u00a0be\u00a0updated.\u00a0Bowman\u00a0said\u00a0on\u00a0Thursday\u00a0that\u00a0the\u00a0Fed\u00a0plans\u00a0to\u00a0update\u00a0some\u00a0calculation\u00a0inputs,\u00a0which\u00a0were\u00a0fixed\u00a0in\u00a02015,\u00a0to\u00a0adjust\u00a0for\u00a0economic\u00a0growth\u00a0and\u00a0in\u00a0turn\u00a0more\u00a0accurately\u00a0reflect\u00a0the\u00a0size\u00a0of\u00a0the\u00a0banks\u00a0relative\u00a0to\u00a0the\u00a0global\u00a0economy.\u00a0The\u00a0Fed\u00a0had\u00a0previously\u00a0considered\u00a0that\u00a0change,\u00a0but\u00a0the\u00a0effort\u00a0stalled\u00a0amid\u00a0the\u00a0broader\u00a0Basel\u00a0fight.<\/p>\n
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The\u00a0US\u00a0proposal\u00a0would\u00a0overhaul\u00a0how\u00a0large\u00a0banks\u00a0gauge\u00a0their\u00a0risk,\u00a0and\u00a0in\u00a0turn,\u00a0how\u00a0much\u00a0capital\u00a0they\u00a0should\u00a0set\u00a0aside\u00a0as\u00a0a\u00a0cushion\u00a0against\u00a0potential\u00a0losses.\u00a0The\u00a0main\u00a0areas\u00a0of\u00a0focus\u00a0are\u00a0credit\u00a0risk,\u00a0market\u00a0risk\u00a0and\u00a0operational\u00a0risk.\u00a0On\u00a0Thursday,\u00a0Bowman\u00a0said\u00a0the\u00a0new\u00a0proposal\u00a0would\u00a0\u201cright-size\u201d\u00a0requirements\u00a0to\u00a0better\u00a0capture\u00a0risks,\u00a0while\u00a0minimizing\u00a0overlaps.\u00a0The\u00a0changes\u00a0would\u00a0also\u00a0give\u00a0banks\u00a0relief\u00a0for\u00a0activities\u00a0regulators\u00a0see\u00a0as\u00a0less\u00a0risky\u00a0and\u00a0which\u00a0they\u00a0want\u00a0to\u00a0promote,\u00a0such\u00a0as\u00a0mortgage\u00a0lending. \u00a0 For\u00a0smaller\u00a0banks,\u00a0the\u00a0plan\u00a0would\u00a0create\u00a0a\u00a0new\u00a0standardized\u00a0measurement\u00a0of\u00a0risk\u00a0which\u00a0would\u00a0\u201cmoderately\u00a0reduce\u201d\u00a0their\u00a0requirements\u00a0and\u00a0\u200cincentivize\u00a0lending.\u00a0Overall,\u00a0Basel\u00a0is\u00a0still\u00a0expected\u00a0to\u00a0raise\u00a0\u200ccapital\u00a0slightly\u00a0for\u00a0the\u00a0largest,\u00a0riskiest\u00a0banks.\u00a0But\u00a0when\u00a0combined\u00a0with\u00a0changes\u00a0to\u00a0a\u00a0surcharge\u00a0levied\u00a0on\u00a0risky\u00a0global\u00a0or\u00a0\u201cGSIB\u201d\u00a0US\u00a0banks,\u00a0capital\u00a0at\u00a0the\u00a0biggest\u00a0Wall\u00a0Street\u00a0banks\u00a0would\u00a0shrink\u00a0\u201ca\u00a0small\u00a0amount,\u201d\u00a0she\u00a0said. \u00a0…\n","protected":false},"author":2,"featured_media":32310,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[8],"tags":[1712,77,15755,11750,1027,6305,19351,3828,599,3310,3686,1963,6306],"class_list":["post-32309","post","type-post","status-publish","format-standard","has-post-thumbnail","category-basel","tag-banks","tag-basel","tag-capital","tag-comment","tag-doha","tag-gulf","tag-gulftimes","tag-opinion","tag-qatar","tag-regulation","tag-times","tag-trump","tag-viewpoint"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/116231515874180265","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/32309","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=32309"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/32309\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/32310"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=32309"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=32309"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=32309"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}