![]() If adopted, it would mark both the completion of a process toward tighter bank oversight that started in the wake of the 2008 financial crisis and the beginning of the government’s regulatory response to a series of painful bank blowups this year.įor the eight largest banks, the new proposal could raise capital requirements to about 14 percent on average, from about 12 percent now. The reason for all of the drama is that the proposal - which the Fed released alongside two other banking agencies - would notably tighten the rules for both America’s largest banks and their slightly smaller counterparts. “The costs of this proposal, if implemented in its current form, would be substantial,” Michelle Bowman, a Fed governor and an increasingly frequent critic of Mr. Barr’s own colleagues have opposed the proposed changes: Two of the Fed’s seven governors, both Trump appointees, voted against them in a stark sign of discord at the consensus-oriented institution. On Tuesday, the organization and other trade groups appeared to lay the groundwork to sue over the proposal, arguing that the Fed violated the law by relying on analysis that was not made public. The Bank Policy Institute, a trade group, recently rolled out a national ad campaign urging Americans to “ demand answers” on the Fed’s new capital rules. Lawmakers sent worried letters to the Fed and peppered its officials with questions about what the proposal would contain. The proposal would push up the amount of easy-access money that banks need to have at the ready, potentially cutting into their profits.Įven before its release, rumors of what the draft contained triggered a lobbying blitz: Bank of America’s lobbyists and those affiliated with banks including BNP Paribas, HSBC and TD Bank descended on Capitol Hill. banks,” Kevin Fromer, the president of the Financial Services Forum, said in a statement after regulators released the draft rules spearheaded by Mr. “There is no justification for significant increases in capital at the largest U.S. That hasn’t stopped America’s biggest banks, their lobbying groups and even his own colleagues, who have reacted to his proposal to tighten and expand oversight of the nation’s large lenders with a mix of incredulity and outrage. Yelling at Michael Barr, the Federal Reserve’s top banking regulator, has never been particularly effective, his friends and co-workers will tell you.
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