In The News

“Not only are these regulations misplaced and inappropriate, but they also come at a horrible time for small businesses, when headwinds remain relentless, and capital and credit are becoming more difficult and expensive to access.”

“There is no cumulative impact statement from the agencies, and that’s just a profound failure of analytical rigor,” Karen Petrou, managing partner of Federal Financial Analytics, said.

“Sensible regulation depends on knowing when a tool loses its effectiveness and becomes counterproductive. More is not always better.”

“The implication is a massive reduction in the amount of capital that’s available to decarbonize our energy system and make investments in cheaper energy assets,” Rep. Sean Casten (D-Ill.) said in an interview.

“Home buyers, entrepreneurs and public officials are confronting a new reality: If they want to hold off on big purchases or investments until borrowing is less expensive, it’s probably going to be a long wait.”

“There is probably no industry in America that comes under more intense regulatory scrutiny than our banks — which have at least five separate federal agencies overseeing their activities. The lending industry is overregulated, not underregulated. Congress and regulators want more control. The regulators are asking Congress to raise capital requirements on their loans. This…

McKernan: “The bank regulators have not offered a calibration rationale for capital requirements.”

Hispanic Leadership Fund President: “More stringent capital requirements will force banks to reduce credit to many low-income Americans, especially those with lower credit scores.”

“New Federal Reserve rules meant to make big banks safer — the set of plans known as Basel Endgame — would make it even harder for low- and middle-income Americans, a group that includes a disproportionate number of Black Americans, to get a mortgage.”

“Regulators could water down or withdraw the proposal.”

“The banking industry, with support from GOP allies on Capitol Hill, is vigorously pushing regulators to pare back a plan rolled out in July to raise bank capital requirements by up to 19 percent in order to stave off future bailouts.”

Rising deposit costs and capital needs are making lenders pickier, at the cost of growth.

Former NY Fed President Dudley: “more capital isn’t the right solution for every problem.”

“If we’re asking banks to build and maintain branches in underserved communities, why are we penalizing them for serving those communities?” – President and CEO of the National Housing Conference.

“The margin for error seems to be increasingly slim — and that could mean the difference between a soft landing and a crash landing.”

“The potential costs of boosting capital requirements at the current moment could exceed the benefits.”

“As the regulators receive comments and turn to finalize the proposal over the next year, they should explicitly quantify and enumerate the direct and indirect costs the proposal will impose on banks and their counterparties.”

“A sweeping overhaul of bank capital rules proposed by regulators includes changes to requirements for residential mortgages that will likely inflame criticism that the measures push home-ownership beyond the reach of first-time or minority borrowers.”

“U.S. and global regulators raised large bank capital requirements significantly in the wake of the global financial crisis,” Powell said in a statement. “While there could be benefits of still higher capital, as always, we must also consider the potential costs.”

“A divisive capital proposal released Thursday could lead banks with $100 billion or more in assets to further distance themselves from the housing finance business.”

“Vice Chairman Barr is going to face economic, political, procedural and even personal hurdles in getting these regulatory changes done,” said Isaac Boltansky, director of policy research for brokerage BTIG.

“Economic risk from new regulation is a real threat,” says CEO of the Structured Finance Association.

Former Federal Reserve Vice Chair for Supervision Randal Quarles criticized his successor’s plan to significantly increase capital requirements for big banks, saying it would needlessly hurt the economy.

The Coalition for Derivatives End-Users — a group that represents firms that primarily use derivatives to hedge their financial risk — urged the Fed, FDIC and OCC in a letter today to proceed with caution on raising bank capital requirements.

Big US banks are strong, so why is the Federal Reserve about to impose higher capital requirements?

Federal Reserve Gov. Michelle Bowman said supervision and liquidity, not capital requirements, should be at the heart of any regulatory reforms that come out of the central bank this year.

As federal regulators prepare to propose new capital standards this summer, a debate has emerged over their timing and potential impact on the real economy.

A credit-tightening increase on capital standards won’t help the American economy.

“Radical reform of the bank regulatory framework – as opposed to targeted changes to address identified root causes of banking system stress – is incompatible with the fundamental strength of the banking system.”

“During a Senate Banking hearing with regulators, some centrist Democrats bristled at the idea of making sweeping policy changes in response to a recent string of bank failures.”

“Given that capital requirements strongly influence the cost and amount of lending by banks in our economy, getting the mix of requirements right is critical, as is transparency around this process.”