Members of the governing board of the Federal Reserve (Fed, US central bank) are disagree on proposed changes to banking rulesahead of a rare public meeting of the governing body on Thursday.
The proposals put forward by Michael Barr, the Fed’s vice president of supervision, seek an increase in capital requirements for large and medium-sized banksas well as changes in the way they assess risk.
Such measures, which have been under consideration for some time, received increased attention after the March banking crisis caused by the collapse of regional lender Silicon Valley Bank (SVB) after it took on excessive interest rate risk.
“The goal of our actions today is simple: increase the strength and resilience of the banking system with better alignment of capital requirements with risk,” Barr said in a statement before the meeting.
However, two federated governorsMichelle Bowman and Christopher Waller, publicly expressed their disagreement with the proposalsespecially that of increasing capital requirements by an average of 16%.
In a statement, Bowman expressed concern that the proposal “will add to the challenges facing the banking system and imposes real costs on banks, their customers, and the economy without commensurate benefits to safety, soundness, or reliability.” financial stability”.
“I don’t think it’s worth bearing these costs without clear benefits for the resilience of the financial system.”Waller wrote in response to the proposals.
The President of the American Bankers Association (ABA), Rob Nicholssaid the proposals were “unnecessary and overly broad”.
“Far from simply matching international banking standards, these changes will require banks operating in the United States to raise capital without justification,” he said in a statement.
This Thursday’s public meeting is something unusual in the Fed’s decision process.
Your president, Jerome Powellindicated for his part that he is in favor of listening to the public during the review period -longer than usual- which runs until November 30.
“Congress and the American people rightly expect us to achieve an effective and efficient regulatory regime that will keep our financial system strong and protect our economy, without imposing more of a burden than is necessary,” it said in a statement.
“I look forward to hearing from all interested parties on how best to improve this balance,” he added.