Federal Reserve’s Powell: Regulatory proposal criticized by banks will be revised by end of year
By Christopher Rugaber, The Associated Press on March 7, 2024.
WASHINGTON (AP) – A sweeping bank regulatory proposal will be significantly revised by year’s end, Federal Reserve Chair Jerome Powell said Thursday, a potential victory for the large banks that have aggressively opposed the likely changes. The proposed rule, issued last summer by the Fed and other regulatory agencies, is intended to implement changes that were negotiated internationally after the 2008 global financial crisis. Among other things, the rule would require the largest banks – those with more than $100 billion in assets – to hold more funds in reserve to protect against bad loans and other potential losses. Large banks, though, have resisted the proposal, known as the “Basel III endgame” and spearheaded by the Fed’s vice chair for supervision, Michael Barr. The banks argue that the proposal would limit their ability to lend and would exceed what is necessary to match the global rules. Banks aren’t the only opponents of the proposal. The NAACP and some other civil rights groups have expressed opposition out of concern that the proposal would make it harder for Black and Hispanic Americans to obtain mortgage loans. Powell, under questioning by the Senate Banking Committee during his semi-annual testimony to Congress, acknowledged that the proposal could potentially reduce mortgage lending. “There is a risk like that, and we’re very focused on it,” he said. 7-6
