Higher Capital
Requirements
Have a Price Tag

And it’s paid by all Americans, through:

expensive

More expensive and fewer loans for families and businesses

financial-information

Slower U.S. economic growth

weakness

Disruptions to key financial markets

caution

Increasing financial risk by pushing activity outside of the regulated sector

globe

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

Financial Services Forum and SIFMA Basel III Endgame Comment Letters

The Financial Services Forum and SIFMA have submitted comment letters on the proposed Basel III Endgame. If implemented, this proposal would lead to a substantial and unwarranted increase in capital requirements for the largest U.S. banks, which will negatively impact the cost and availability of lending, lead to market disruptions, and have broad impacts throughout our economy.

The Latest News

American Banker: I was a Fortune 500 treasurer; to me, the Basel endgame looks ominous

January 23, 2024

Former Chair of the National Association of Corporate Treasurers, Thomas Deas, says “the Fed’s proposed capital rules are a price increase for companies of all sizes and in all sectors.”

Bond Buyer: Muni advocates warn of fallout from proposed Basel III capital reforms

January 17, 2024

“In a letter filed Tuesday ahead of the Jan. 16 public comment deadline, the Government Finance Officers Association joined with six other municipal market industry groups in laying out their argument against the proposal, asking regulators to pause the rulemaking process and consider fallout on the municipal bond market.”

Yahoo Finance: Even some Fed officials are now questioning the Fed’s new bank capital rules

January 17, 2024

“But capital is not costless … Relying simply on the ‘more is better’ approach downplays or ignores … critically important tradeoffs,” said Fed Governor Bowman.

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.

A Solution Looking
for a Problem

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.

basel-figure-1-Smart-Bank-Capital-1

An Initiative From