More expensive and fewer loans for families and businesses
Slower U.S. economic growth
Disruptions to key financial markets
Increasing financial risk by pushing activity outside of the regulated sector
Reduced U.S. economic competitiveness
“Increased capital requirements can negatively impact economic growth by raising the cost of lending and reducing the availability of financing for corporations and consumers.”
PwC, Basel III Endgame: The next generation of capital requirements, April 2023
“Capital and liquidity levels at our largest, most systemically important banks are at multi-decade highs.”
Federal Reserve Chair Jay Powell, January 2022
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“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.”
“Increasing capital requirements at this moment could put downward pressure on the economy, or make a widely anticipated recession worse if it were to occur. Small businesses don’t need the added challenge of constrained availability of affordable financing, especially at a moment when interest rates are high.”
“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.”
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The nation’s largest banks are strong and resilient, with significant capital that helps ensure they can support the economy in times of stress.
In the past two decades, the nation’s largest banks have greatly increased both the quantity and quality of capital – a cushion that helps banks absorb losses and continue to serve clients, customers, and communities. They have nearly tripled their common equity tier 1 capital, the highest quality of regulatory capital. They have also taken a number of other measures to build resiliency.
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In the past two decades, the nation’s largest banks have greatly increased both the quantity and quality of capital – a cushion that helps banks absorb losses and continue to serve clients, customers, and communities. They have nearly tripled their common equity tier 1 capital, the highest quality of regulatory capital. They have also taken a number of other measures to build resiliency.
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