US bank recapitalization proposals are fatally flawed, top lobbying group says By Reuters
© Reuters. FILE PHOTO: The Lower Manhattan skyline is seen before sunrise in New York City, USA, July 17, 2019. REUTERS/Brendan McDermid
(Reuters) – U.S. banking regulators’ proposed new capital requirements for large banks, if finalized, would violate key federal laws and impose unnecessarily burdensome costs on 80% of the U.S. banking system’s assets, a major industry lobbying group said on Friday. Yes.
As a result, the U.S. Federal Reserve and two other agencies announced in July that they would They say the published proposal should be completely scrapped and reissued. Co (NYSE:) and Bank of America.
Two others, the Securities Industry and Financial Markets Association and the U.S. Chamber of Commerce, also signed the letter.
The banking industry has fiercely opposed the proposal, which would be the last in a series of reforms implemented in response to the global financial crisis more than 15 years ago.
Michael Barr, vice-chairman of central bank supervision and a key architect of the proposal, has defended the plan in recent months, saying it would have a limited impact on borrowing costs, but has given no sign that officials are considering public reaction. I sent. Comments are due on Tuesday.
According to Friday’s letter, the proposal would result in a “complete overhaul” of how the risks inherent in bank assets are calculated, increasing regulatory costs for banks. At the same time, it said its claimed benefits have not been quantified.
The letter argues that the main statute governing how regulations are written requires proposal drafters to use evidence to evaluate costs and benefits, but has not done enough to do so.
As a result, the proposal’s deficiencies “can only be addressed through the proposal of new rules,” the letter said.
Spokespeople for the Federal Reserve and the Federal Deposit Insurance Corporation declined to comment. The Office of the Comptroller of the Currency did not immediately respond to a request for comment.
