Over the past week, regulators have proposed the most substantial changes to capital requirements for the largest banks in years, but the most startling thing was how unremarkable they were.
The Federal Reserve Board's vice chairman for supervision said he did not foresee the agency’s regulatory review as significantly reducing capital levels.
The final plan to end "too big to fail" suggests that banks with less than $10 billion be subject to a much less complicated risk-based capital regime, akin to what was required in Basel I.
The House Financial Services Committee began consideration of 14 bills on Tuesday, including one that would stop Fannie Mae and Freddie Mac from being released by the government and another hailed as helping the underbanked in rural areas.
Federal Reserve Gov. Jerome Powell said capital levels have been well calibrated but that some changes to the capital rules may be in order to make compliance easier.
Regulators disagree whether proposed changes to capital requirements would ease burden on community banks; JPMorgan on hook if jury award not overturned.
The proposal is aimed at a simpler capital regime particularly for community banks, but some industry representatives and regulators themselves questioned whether the plan went far enough.
A perfect risk-based capital ratio obviously is preferable to an admittedly imperfect leverage ratio. The problem is there is no perfect risk-based measure.
Democrats drew a line in the sand Wednesday, opposing a provision in a GOP bill that would allow banks to comply with fewer rules in exchange for holding more capital.
