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CONTACT: Laura Peavey(202) 457-8770lpeavey@fsforum.comBankThink Op-Ed: Banks need relief from restrictive leverage capital requirements“Current leverage-based requirements are outdated, counterproductive, and urgently need reform.”Washington, D.C. &nbsp;– Financial Services Forum President and CEO Kevin Fromer published an opinion piece in American Banker’s BankThink discussing the urgent need to reform bank leverage capital requirements to better serve taxpayers, capital markets, consumers, businesses, and the economy.Read the full op-ed <a href="https://fsforum.com/a/media/ab-op-ed-march-2025.pdf">here</a>.&nbsp;A lot has changed in the past four years: Taylor Swift has released six albums, Alex Ovechkin has scored more than 130 goals and even the Washington Commanders have made it to the NFL playoffs.&nbsp;But one thing has not: leverage requirements. &nbsp;In March 2021, the Federal Reserve <a href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210319a.htm">pledged</a> to adjust bank leverage <a href="https://www.americanbanker.com/tag/minimum-capital-requirements">capital requirements</a> due to their impact on financial markets and the economy. The central bank promised change "shortly," but four years later<a href="https://www.americanbanker.com/news/treasurys-liang-floats-recurring-leverage-ratio-relief"> we're still waiting</a>, and the economic costs continue to mount.&nbsp;&nbsp;Leverage capital requirements are insensitive to risk, forcing banks to choose higher-returning assets over low-risk assets, including U.S. Treasuries. That deters leading U.S. banks from helping the government meet its ever-increasing borrowing needs, harming market functioning and liquidity, and leading to higher interest rates across the country.Fed Chair Jerome Powell in February<a href="https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=409453"> told</a> lawmakers "It's time" <a href="https://www.americanbanker.com/news/powell-backs-leverage-ratio-update-treasury-market-reform">to address the issue</a>, while Treasury Secretary Bessent earlier this month <a href="https://home.treasury.gov/news/press-releases/sb0045">said</a>, "rigorous analysis" of these requirements was needed.&nbsp;&nbsp;I agree.&nbsp;&nbsp;&nbsp;&nbsp;Continue reading the op-ed in American Banker’s BankThink <a href="https://fsforum.com/a/media/ab-op-ed-march-2025.pdf">here</a>.&nbsp;###The Financial Services Forum is an economic policy and advocacy organization whose members are the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve&nbsp;millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system. Visit our website: <a href="http://www.fsforum.com/">fsforum.com</a>Follow us on X <a href="https://twitter.com/fsforum">@fsforum</a> and <a href="https://www.linkedin.com/company/financial-services-forum/">LinkedIn</a>&nbsp;

BankThink Op-Ed: Banks need relief from restrictive leverage capital requirements

Observations and Recommendations for a New Administration and U.S. Economic Growth

<h3>Introduction</h3>Nearly four years ago, the Federal Reserve <a href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210319a.htm">committed</a> to reconsider the supplementary leverage ratio (SLR) in light of the massive, COVID-driven expansion of the Federal Reserve’s balance sheet.&nbsp; Today, the Federal Reserve’s balance sheet still stands at nearly double its pre-expansion level, but no action has been taken to reform the SLR.&nbsp; Accordingly, there is an urgent need to reconsider the SLR in short order.&nbsp; The current level of the Federal Reserve’s balance sheet, coupled with the existing SLR regulation, results in an unnecessarily binding, risk-blind, capital constraint that is having significant deleterious impacts on financial markets and the economy. &nbsp;In the remainder of this post, we discuss the problems created by risk-blind leverage requirements that have been identified through rigorous academic research.<h3>The Backdrop</h3>The SLR was introduced as a capital requirement for large banks in 2018.&nbsp; The SLR is a risk-blind capital requirement that mandates all large banks to maintain five percent capital against all bank assets irrespective of their risk.&nbsp; Importantly, low-yielding and default-free U.S. Treasury securities and bank reserves issued by the Federal Reserve, the most liquid and risk-free asset in the world economy, must be backed by five percent capital.&nbsp; At the same time, higher-yielding assets such as corporate loans or corporate bonds also require five percent capital under the SLR.&nbsp; In a world in which all assets have the same capital cost, there is a clear and unavoidable incentive to hold higher-yielding assets (corporate loans) than lower-yielding ones (U.S. Treasuries).Back in 2018, the size of the Federal Reserve’s balance sheet was roughly $4 trillion.&nbsp; Today, the Federal Reserve’s balance sheet stands at $6.8 trillion.&nbsp; The additional $2.8 trillion in Federal Reserve assets are largely financed by issuing bank reserves.&nbsp; In the aggregate, banks must hold all of the bank reserves issued by the Federal Reserve.&nbsp; Accordingly, when the Federal Reserve increases its balance sheet it necessarily increases the amount of risk-free assets held by banks and these assets are subject to the 5 percent capital requirement of the SLR.Now that the Federal Reserve is so much larger, more banks are adversely impacted by the SLR because they are required to maintain additional capital on all the additional, risk-free, bank reserves.&nbsp; As the amount of capital required by the SLR has risen, the incentives to pull back on low-risk assets such as U.S. Treasury securities have concomitantly increased.Finally, it is important to fully appreciate how the financial system has changed since 2018.&nbsp; Table 1 below, depicts: 1) the level of the Federal Reserve’s balance sheet, 2) the amount of U.S. Treasury debt outstanding, and 3) the annual interest cost of government debt.<figure class="image"><img src="https://fsforum.com/a/media/3.10.25.png"></figure>As shown in Table 1, while the Federal Reserve has expanded its balance sheet, we have seen a nearly identical expansion in debt issued by the federal government as both have increased by roughly 65 percent.&nbsp; Moreover, the amount of money the government is spending to service its debt has grown by much more, 83 percent, owing to both an increase in outstanding debt and the general increase in interest rates that has occurred recently.&nbsp;Indeed, for the first time since records have been kept, the federal government is now spending more on interest payments than on national defense.&nbsp; What’s more, current projections of federal spending suggest that this gap will only widen in the future and that the nation’s interest bill will only become more pressing.&nbsp; As Table 1 makes clear, the financial system in 2025 looks completely different from the one we knew in 2018 when the SLR was introduced.With this backdrop in mind, it is essential that the U.S. government – including the Federal Reserve – do everything in its power to manage the federal debt, contribute to a well-functioning U.S. Treasury market, and minimize the cost of servicing our national debt.&nbsp; Unfortunately, the current stance of the SLR is antithetical to all these goals.&nbsp;&nbsp;&nbsp;<h3>What Does Research Say About Risk-Blind Leverage Requirements and the U.S. Treasury Market?</h3>We have asserted that leverage requirements are impairing the market for U.S. Treasuries and artificially increasing the cost of government debt.&nbsp; What exactly is the basis for these claims?&nbsp; The best way to assess these claims is to simply look at data-based economic research that has studied the impact of the SLR on U.S. Treasuries and financial markets.&nbsp; Luckily, this is a broad and active area of research.&nbsp; Below, we highlight three relatively recent contributions:<ul><li>A 2024 research <a href="https://www.bostonfed.org/publications/research-department-working-paper/2024/the-effect-of-primary-dealer-constraints-on-intermediation-in-the-treasury-market.aspx">paper</a> by economists at the Federal Reserve Bank of Boston found that the SLR had significant negative impacts on the ability of large dealer banks to intermediate the U.S. Treasury market.&nbsp; Specifically, they found that in response to a more restrictive SLR, dealers reduced their Treasury holdings, leading to a reduction in trading, an increase in the cost of buying and selling U.S. Treasuries, and a weaker response to Treasury auctions.&nbsp;</li><li>A 2022 research <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4175429">paper</a> by economists at the Federal Reserve Board found that banks respond to balance sheet shocks by reducing their exposure to U.S. Treasuries, particularly through reductions in repo activity. Importantly, the paper distinguishes the SLR’s impact from other regulatory requirements, such as risk-based capital and liquidity coverage ratio requirements, finding that the SLR uniquely constrains a bank’s ability to intermediate the Treasury market. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>A 2023 research <a href="https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr1070.pdf?sc_lang=en">paper</a> by economists at the Federal Reserve Bank of New York and others found that when U.S. Treasury dealers face capacity constraints, such as occurs from an increasingly binding SLR, the liquidity of the U.S. Treasury market worsens.&nbsp; In particular, as regulatory constraints become more binding, Treasury markets become more volatile and trading in the U.S. Treasury market becomes more costly.&nbsp;&nbsp;&nbsp;</li></ul>The research above makes clear that the SLR is imposing well-documented and significant costs on U.S. Treasury markets and the broader economy.&nbsp; Indeed, the U.S. Treasury market underpins essentially every other financial asset in the world.&nbsp; Accordingly, problems in the U.S. Treasury market necessarily migrate broadly throughout the rest of the financial system.&nbsp; In particular, any increase in U.S. Treasury yields or other strains will immediately spill over into the market for home mortgages, auto loans, business loans and essentially any other financial product used by households and businesses.&nbsp; For all these reasons, the Federal Reserve should take immediate action to reconsider risk-blind leverage requirements to address clearly documented problems in the U.S. Treasury market.Each of the papers above is notable because they are authored by staff of the Federal Reserve system.&nbsp; One might reasonably wonder why so much of this research emanates from within the system.&nbsp; The answer lies in the fact that each of the research papers uses confidential bank data that only the Federal Reserve can access.&nbsp; There is indeed a deep irony that only the Federal Reserve system is truly able to fully assess the implications of leverage constraints on Treasury markets, yet the Federal Reserve has so far failed to act on the findings of its own researchers.<h3>But Wait…There’s More</h3>Much of the research literature and discussion of leverage requirements revolves around the SLR.&nbsp; Lurking in the shadows lies yet another, often hidden, leverage requirement - the Tier 1 leverage requirement.&nbsp; The Tier 1 leverage requirement (T1L) is the precursor to the SLR; it was in effect for decades before the SLR was introduced and is still in effect today.&nbsp; The T1L requirement is essentially the classic, historical leverage ratio that has been used for over 100 years and was arguably a relevant capital metric 100 years ago – capital divided by total assets.&nbsp; The SLR is “supplementary” in the sense that the SLR includes certain off-balance sheet exposures like derivatives and loan commitments that are not recorded in total assets due to technical accounting rules.&nbsp;One might reasonably ask why the T1L requirement was not “de-commissioned” following the introduction of the SLR.&nbsp; The basic answer simply amounts to the fact that bureaucracies are good at creating new rules and bad at eliminating old, outmoded, and unnecessary rules.&nbsp; Dealing with the SLR without dealing with T1L would be a mistake.&nbsp; Modifying the SLR without dealing with T1L would simply amount to replacing the SLR with T1L as the new risk-blind leverage requirement and we would be back to square one all over again.&nbsp; Accordingly, it is important that T1L be addressed alongside the SLR.<h3>Conclusion</h3>Sample evidence and research, often conducted by Federal Reserve system staff, clearly show that risk-blind leverage requirements have been impairing the market for U.S. Treasuries for some time.&nbsp; The problems in the U.S. Treasury market are all the more pressing due to the steep rise in government interest payments and forecasts for an increase in the amount of government borrowing.&nbsp; The Federal Reserve, and other regulators and policymakers, should act swiftly to address the deleterious consequences of risk-blind leverage requirements on the economy.

Promises Made, Promises Kept? The Urgency of Leverage Ratio Reform

Bank Leverage Capital Requirements 

CONTACT: Laura Peavey(202) 457-8770lpeavey@fsforum.comForum Welcomes FDIC Guidance on Crypto-Related ActivitiesAction is a “welcome step toward providing much-needed regulatory clarity that empowers U.S. banks to collaborate with new technologies”Washington, D.C.&nbsp;– Financial Services Forum President and CEO Kevin Fromer issued the following statement today in response to the clarification of guidance by the Federal Deposit Insurance Corporation (FDIC) on&nbsp;crypto-related bank activities:“This is a welcome step toward providing much-needed regulatory clarity that empowers U.S. banks to collaborate with new technologies. Previous FDIC guidance hindered banks’ ability to participate in the digital asset ecosystem. The Forum encourages the Federal Reserve to swiftly follow suit to ensure financial institutions can fully engage in crypto-related activities in a safe and sound manner.”###The Financial Services Forum is an economic policy and advocacy organization whose members are the eight largest and most diversified financial institutions headquartered in the United States.&nbsp; Forum member institutions are a leading source of lending and investment in the United States and serve&nbsp;millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system. Visit our website: <a href="http://www.fsforum.com/">fsforum.com</a>Follow us on X <a href="https://twitter.com/fsforum">@fsforum</a> and <a href="https://www.linkedin.com/company/financial-services-forum/">LinkedIn</a>

Press Releases

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The Forum supports the development of international standards that utilize the existing framework for banking assets when considering how to treat crypto assets for capital, liquidity and other regulations.

Digital Assets

Forum Welcomes FDIC Guidance on Crypto-Related Activities

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Increases in capital requirements would harm American households, businesses, and the broader economy. Regulators must carefully consider the economic impact of higher capital requirements, because they affect the whole economy, not just banks.

Capital, other topics

CONTACT: Laura Peavey(202) 457-8770&nbsp;<a href="mailto:lpeavey@fsforum.com">lpeavey@fsforum.com</a>Forum Statement on OCC’s Removal of Reputation RiskWashington, D.C. – Financial Services Forum President and CEO Kevin Fromer issued the following statement after the Office of the Comptroller of the Currency (OCC) announced it will no longer examine its regulated institutions for reputation risk:“We appreciate the OCC’s action to ensure bank supervision is focused on financial and other material risks. Today’s decision is an important step to create a more transparent and effective regulatory environment. We look forward to continuing to work with the Administration and Congress to identify solutions that allow America’s leading banks to continue to best serve their customers.”###The Financial Services Forum is an economic policy and advocacy organization whose members are the eight largest and most diversified financial institutions headquartered in the United States.&nbsp; Forum member institutions are a leading source of lending and investment in the United States and serve&nbsp;millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system. Visit our website: <a href="http://www.fsforum.com/">fsforum.com</a>Follow us on Twitter <a href="https://twitter.com/fsforum">@fsforum</a> and <a href="https://www.linkedin.com/company/financial-services-forum/">LinkedIn</a>

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The Forum advocates for appropriate policy and regulation that promotes a strong, diverse financial system and supports the needs of our economy and American competitiveness.

Regulatory, other topics 

Forum Statement on OCC’s Removal of Reputation Risk

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Citigroup

Jane Fraser is the Chief Executive Officer of Citi, the world's most global bank, serving millions of consumers, businesses and institutions across 160 countries and jurisdictions. She is the first female CEO in the firm’s history. Jane has deep experience across Citi’s consumer and institutional businesses and, in many ways, she helped shape Citi into the company it is today. Before becoming CEO in February 2021, she was President of Citi and CEO of the Global Consumer Bank, responsible for all of Citi’s Consumer businesses, including Retail Banking and Wealth Management, Credit Cards, Mortgage and Operations and Technology in 19 markets. Before that, she was the Chief Executive Officer of Citigroup Latin America from 2015 to 2019. From 2013 to 2015, she was the Chief Executive Officer of the U.S. Consumer and Commercial Banking and CitiMortgage. From 2009 to 2013, Jane served as the Chief Executive Officer of Citi's Global Private Bank. Prior, Jane was the Global Head of Strategy and Mergers &amp; Acquisitions for Citi from 2007 to 2009. She joined Citi in 2004 in the Corporate and Investment Banking division. Before joining Citi, Jane was a Partner at McKinsey &amp; Company. She started her career at Goldman Sachs in the Mergers &amp; Acquisitions department in London and then worked for Asesores Bursátiles in Madrid, Spain. Jane serves as a Board Member for the Business Roundtable and the Council on Foreign Relations. She is Vice Chair for the Partnership for New York City and a member of Harvard Business School’s Board of Dean’s Advisors, the Stanford Global Advisory Board and the Economic Club of New York. Jane has an M.B.A. from Harvard Business School and an M.A. in economics from Cambridge University. She is married with two children.

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Jane Fraser

Citigroup Chief Executive Officer, Forum Chair

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BNY 

Robin Vince is President and Chief Executive Officer of BNY and a member of its Board of Directors. Previously, he was Vice Chair of BNY and CEO of Global Market Infrastructure. In that role, he oversaw BNY’s Clearance and Collateral Management, Treasury Services, Markets and Execution Services and Pershing businesses. Prior to joining BNY in October 2020, Robin was the Chief Risk Officer of Goldman Sachs and a member of the Management Committee. He joined Goldman Sachs in 1994 and held many leadership roles, including Treasurer, Head of Operations, Head of Global Money Markets, COO of the EMEA region and CEO of Goldman Sachs International Bank, among others. He served on several key subsidiary boards and governance committees. He was named managing director in 2002 and partner in 2006. Robin is a member of National Geographic Society's Hubbard Council and serves on the Board of Advisors of The Hospital for Special Surgery.

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Robin Vince 

BNY Chief Executive Officer, Forum Vice Chair

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Bank Of America

Brian Moynihan leads a team of more than 200,000 employees dedicated to making financial lives better for people, companies of every size, and institutional investors across the United States and around the world. Bank of America is recognized as a top employer by Working Mother magazine and Military Times. The company is also listed on Fortune magazine’s list of the Best Workplaces for Diversity and the Best Workplaces for Parents. It was also named one of the Best Places to Work for Disability Inclusion by the U.S. Business Leadership Network and the American Association of People with Disabilities. In 2018, Euromoney recognized Bank of America as the World’s Best Bank and the World’s Best Bank for Diversity and Inclusion, as part of their annual Global Awards for Excellence. Bank of America was also named the 2019 Catalyst Award winner, honored for supporting the continued development, empowerment and advancement of women in the company and around the world. Moynihan participates in several organizations that focus on economic and market trends, including the World Economic Forum International Business Council, the Financial Services Forum, the Bank Policy Institute (chair), the Business Roundtable, and the American Heart Association CEO Roundtable (co-chair). He is also a member of the Federal Advisory Council of the Federal Reserve Board. Moynihan leads the company’s Global Diversity and Inclusion Council and is a member of the museum council for the Smithsonian’s National Museum of African American History and Culture. Moynihan is also a member of the Brown University Corporation’s Board of Fellows and the Congressional Medal of Honor Foundation Board.

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Brian Moynihan

Bank Of America Chairman Of The Board And Chief Executive Officer

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The Goldman Sachs Group, Inc.

David Solomon is Chairman and Chief Executive Officer and a member of the Board of Directors of The Goldman Sachs Group, Inc. Previously, he was President and Chief Operating Officer and prior to that, he served as Co-Head of the Investment Banking Division from 2006 to 2016. Before that, Mr. Solomon was Global Head of the Financing Group, which includes all capital markets and derivative products for the firm’s corporate clients. He joined Goldman Sachs as a Partner in 1999. Mr. Solomon is a member of the Board of Trustees of Hamilton College and serves on the board of The Robin Hood Foundation.

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David Solomon

The Goldman Sachs Group, Inc. Chairman and Chief Executive Officer

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JPMorganChase 

Jamie Dimon is Chairman of the Board and Chief Executive Officer of JPMorganChase, a global financial services firm with assets of $2.5 trillion and operations worldwide. The firm is a leader in investment banking, financial services for consumers, small business, commercial banking, financial transaction processing and asset management. Dimon became CEO on January 1, 2006 and one year later also became Chairman of the Board. He was named President and Chief Operating Officer upon the company’s merger with Bank One Corporation on July 1, 2004. Dimon joined Bank One as Chairman and CEO in 2000. Dimon began his career at American Express Company. Next, he served as Chief Financial Officer and then President at Commercial Credit, which made numerous acquisitions and divestitures, including acquiring Primerica Corporation in 1987 and The Travelers Corporation in 1993. Dimon served as President and Chief Operating Officer of Travelers from 1990 through 1998 while concurrently serving as Chief Operating Officer of its Smith Barney Inc. subsidiary before becoming co-Chairman and Co-CEO of the combined brokerage following the 1997 merger of Smith Barney and Salomon Brothers. In 1998, Dimon was named President of Citigroup Inc., the global financial services company formed by the combination of Travelers Group and Citicorp. Dimon earned his bachelors degree from Tufts University and holds an MBA from Harvard Business School. He serves on the boards of directors of a number of non-profit institutions including the Clearing House and Harvard Business School. Additionally, he is the Chairman of the Business Roundtable and serves on the executive committee of the Business Council and the Partnership for New York City, and is a member of the Financial Services Forum, Financial Services Roundtable and Council on Foreign Relations.

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Jamie Dimon

JPMorganChase Chairman And Chief Executive Officer

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Morgan Stanley

Edward (Ted) Pick is the Chief Executive Officer of Morgan Stanley.Before becoming CEO in 2024, Mr. Pick served as Morgan Stanley's Co-President, Co-Head of Firm Strategy and Head of the Institutional Securities Group, overseeing Investment Banking, Equities, Fixed Income, Global Capital Markets and Research.&nbsp;In previous roles, Mr. Pick was Global Head of Sales and Trading, engineering a turnaround of the firm’s Fixed Income Division. As Head of Institutional Equities, he led that business to a leading global position. He also served as Head of Equity Capital Markets, helping the firm actively raise capital during the financial crisis.&nbsp;Mr. Pick joined Morgan Stanley in 1990 and was promoted to Managing Director in 2002. He is a member of the firm’s Board of Directors (2024), Operating Committee (2012), Management Committee (2008) and Morgan Stanley-MUFG Steering Committee (2013).Mr. Pick graduated Phi Beta Kappa from Middlebury College (1990) and received an MBA from Harvard Business School (1994). He is a Trustee at the Metropolitan Museum of Art (2018), and serves on the MET’s Nominating &amp; Governance Committees. Mr. Pick is Chair of the Advisory Board for the Morgan Stanley Alliance for Children’s Mental Health and a board member of the Institute of International Finance.

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Ted Pick

Morgan Stanley Chief Executive Officer

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State Street Corporation

Ron is chairman and chief executive officer of State Street Corporation. He is also a member of State Street Corporation’s Board of Directors. Ron was previously president and chief operating officer of State Street Corporation, and before that president and chief executive officer of State Street Global Advisors, the investment management arm of State Street Corporation. He joined State Street in 2015. Prior to State Street, Ron was president of Asset Management &amp; Corporate Services for Fidelity Investments, responsible for all Fidelity asset management organizations and Fidelity’s corporate functions and enterprise technology. He served at Fidelity from 2010 to 2014. Prior to joining Fidelity, Ron served as president and chief executive officer of BNY Mellon Asset Management in Boston, a position to which he was named in 2007. During this time, he also served as vice chairman of Bank of New York Mellon Corporation and was a member of its Executive Committee. Additionally, Ron oversaw all of Bank of New York Mellon’s activities in Asia. Prior to the 2007 merger of Bank of New York and Mellon, he was vice chairman of Mellon Financial Corporation and president and chief executive officer of Mellon Asset Management. He served at Mellon and Bank of New York Mellon from 1997 to 2010. Prior to Mellon, Ron was with McKinsey &amp; Company, Inc., from 1986 to 1997 and was elected a partner in 1992. He founded the Investment Management practice worldwide and was co-founder and co-leader of the firm’s North American Personal Financial Services practice. Additionally, he was a member of the Worldwide Property &amp; Casualty Insurance practice. During his tenure with McKinsey, Ron served in the firm’s Boston, New York, and Stockholm offices. Ron received his Bachelor of Arts degree in political science from Syracuse University in 1980 and his Master of Business Administration from Harvard Business School in 1986. Ron serves on the boards of Unum Corp. and Rhode Island Commerce Corporation. He also serves on the boards of Beth Israel Lahey Health, The Boston Foundation, IYRS School of Technology and Trades, Syracuse University and WBUR. Ron’s philanthropic and civic interests include corporate governance, retirement/healthcare policy and funding, education, and climate. He has led several initiatives on gender equality. Ron is a frequent speaker and writer, and an avid offshore sailboat racer.

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Ronald O'Hanley

State Street Corporation Chairman And Chief Executive Officer

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Wells Fargo & Company

Charles W. Scharf is chief executive officer and president, and a member of the Board of Directors of Wells Fargo &amp; Company. A financial services veteran with 24 years of experience in leadership roles in the banking and payments industries, Charlie served as chief executive officer of Bank of New York Mellon from July 2017 to October 2019 and the chairman of its board from January 2018 to October 2018. He also was chief executive officer and a director of Visa Inc. from October 2012 to December 2016. During his tenure at Bank of New York Mellon, Charlie demonstrated a strong track record in initiating and leading change, driving results, strengthening operational risk and compliance, and innovating amid a rapidly evolving digital landscape. As the CEO of Visa, Charlie transformed the firm into a technology-driven digital commerce company by partnering with the world’s leading technology companies to drive new payment experiences and introduce new technologies to improve payment system security. Previously, he was a managing director of One Equity Partners at JPMorgan Chase &amp; Co. and chief executive officer of Retail Financial Services at JPMorgan Chase. He also was chief executive officer of the retail division of Bank One Corp., chief financial officer of Bank One Corp., chief financial officer of the Global Corporate and Investment Bank division of Citigroup, and chief financial officer of Salomon Smith Barney and its predecessor company. Charlie earned a Bachelor of Arts degree from Johns Hopkins University and an MBA from New York University. He is a director of Microsoft Corporation, serves on the board of trustees of Johns Hopkins University, is a member of The Business Council, and is chairman of the New York City Ballet. He lives in New York City.&nbsp;

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Charles Scharf

Wells Fargo & Company Chief Executive Officer And President

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We are the eight largest and most diversified financial institutions headquartered in the United States. Our more than 712,269 U.S. employees&nbsp;serve millions of consumers, businesses, investors, and communities across the country.

Forum members increased credit to businesses and households by 17% to $9.3 trillion in 2021.

Despite the demonstrated strength of the largest U.S. banks, the Federal Reserve, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, on split votes, issued a proposal in July 2023 to increase capital requirements. The proposal offers no reason or justification for material increases in capital requirements and would harm American households, businesses, and the broader economy. 

Given the complexity of the proposal, its many and significant negative impacts, and the lack of evidence in support of its changes, the agencies should repropose the rule and include the motivations, data and analysis that demonstrate the need for proposed changes.

Basel 3 Endgame 

The nation’s largest banks are subject to the most stringent liquidity standards among U.S. banks. These standards ensure that the largest U.S. banks have sufficient liquid resources, such as cash, to meet liquidity needs such as when customers withdraw money from their accounts. Since 2009, the U.S. GSIBs have tripled their liquid assets, allowing them to remain strong and continue to lend and support the economy in the face of headwinds.

Liquidity 

Maintaining the international competitiveness of U.S. companies is vital to the success and vibrancy of the U.S. economy. The nation’s largest banks provide crucial support for American companies competing overseas. The Forum supports policies that enable large U.S. banks to continue their vital support of the American economy on the global stage. 

International Competitiveness

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Covid-19 Response

The COVID-19 pandemic is an unprecedented challenge for the world and the global economy and the largest U.S. banks are committed to supporting customers, clients, and the nation.

PPP loans from JPMorgan have supported 3 million workers at small businesses, including those working at Community Wellness Ventures, a mental health services company that serves children and families in Washington, D.C. The PPP loan has helped Dr. Charlayne Hayling-Williams and her husband, Dr. Rod Williams, continue to pay their counselors, social workers, psychologists and housing specialists so that they can continue to serve their community.The majority of Citibank’s PPP loans went to small businesses in the service sector. A PPP loan from Citi helped the Maryland Youth Ballet in Silver Spring retain teaching staff and find a way to teach students safely and retain employees. The students range in age from 2 to 19 years old. “If we hadn’t been able to receive this PPP loan, we wouldn’t be able to keep dancing,” Principal Deidre Byrne says. <a href="https://www.youtube.com/watch?v=dMzepw_oAtQ&amp;feature=youtu.be">Learn more</a>.State Street is a lead sponsor of <a href="https://www.smallbstrong.com/">Small Business Strong</a>, a non-profit organization helping women and minority owned small businesses navigate the devastating impact of the COVID-19 pandemic. Small Business Strong provides expedited, pro-bono resources to small businesses ranging from access to capital to consulting, business restructuring, business growth, digital marketing and customer engagement plans.Another way Forum banks have worked to assist small businesses is by supporting financial institutions with particularly strong connections to certain local communities. Forum banks have increased their support for Community Development Financial Institutions (CDFIs) during the pandemic. CDFIs are private financial institutions that are dedicated to providing responsible, affordable lending to help low-income and typically underserved communities. From 2015 to 2020, <a href="https://www.fsforum.com/wp-content/uploads/2021/01/cdfifactsheetfinal2021.jpg">Forum banks have invested nearly $9 billion in CDFIs.</a> Through such assistance, Forum member banks are working to ensure that small businesses in these communities get the help they need.Goldman Sachs last year committed $1 billion to support lending through CDFIs and other mission-driven lenders. More than 15,000 small businesses with 87,000 employees were supported just partway through the commitments. Nearly half of the initial funds went to businesses in minority communities; one-third went to those in low-income communities. <a href="https://www.forbes.com/sites/maneetahuja/2020/12/15/goldman-sachs-ceo-david-solomon-announces-additional-250-million-investment-in-small-businesses-bringing-total-2020-commitment-to-1-billion/?sh=3739ddc91000">Read more</a>.

Members of the Financial Services Forum have supported small businesses across the country throughout the pandemic, helping provide important resources during a challenging time for many business owners and their employees.

Throughout the pandemic, Forum members facilitated $94 billion in loans to nearly 1.25 million small businesses through the government Paycheck Protection Program. More than a quarter of these loans were made in low- and moderate-income communities and 91 percent of the PPP loans made by Forum members went to businesses with 20 or fewer employees.

At the beginning of 2020, Morgan Stanley launched the <a href="https://www.morganstanley.com/articles/alliance-for-childrens-mental-health-covid-19">Morgan Stanley Alliance for Children’s Mental Health</a> to help address children’s mental health, specifically the far-reaching challenges of stress, anxiety and depression. After the COVID-19 pandemic began, Morgan Stanley made an additional grant to the Child Mind Institute to provide digital mental health resources for children, adolescents and young adults, with a focus on vulnerable communities that traditionally lack access to these resources.Among other areas of focus, the Alliance is promoting public awareness of how the COVID-19 pandemic affects children’s mental health—both now and in the long term.In addition to providing relief to millions of customers, Wells Fargo has redirected millions of dollars from its philanthropic budget to COVID‑19 community relief efforts for the most impacted Americans. The company has worked to streamline grant making and offer highly flexible funding to nearly 1,000 nonprofits reaching more than 800 communities across the country.The program is making a difference in helping those who need it most access small business resources, stay in their homes and obtain financial health resources. In Alabama, a $100,000 grant to the Birmingham Strong Fund is providing emergency loans to small businesses to help stabilize employment, stimulate economic vitality, and offset losses related to COVID‑19. A $100,000 grant to United Way of Greater Los Angeles has helped the group create the Pandemic Relief Fund to support vulnerable populations who are at the greatest risk of health and economic impacts in this crisis. A $160,000 grant to the Institute of Community Alliances is providing rental assistance to shelter residents across the state of Iowa.Bank of America in 2020 announced a $1 billion, four-year commitment of additional support to help local communities address economic and racial inequality accelerated by the global pandemic. The programs are focused on assisting people and communities of color that have experienced a greater impact from the health crisis in areas that include:<ul><li>Virus testing, telemedicine, flu vaccination clinics, and other health services, with a special focus on communities of color.</li><li>Partnerships with historically black colleges and universities and Hispanic-serving institutions in the United States for hiring, research programs, and other areas of mutual opportunity.</li><li>Support to minority-owned small businesses, including clients and vendors.</li><li>Career reskilling/upskilling through partnerships with high schools and community colleges.</li><li>Operating support and investment for affordable housing/neighborhood revitalization, leveraging the company’s nearly $5 billion in Community Development Banking.</li><li>Further recruitment and retention of teammates in low- to moderate-income and disadvantaged communities to build on work the company has already done to serve clients locally.</li></ul>

Forum members have collectively committed billions of dollars to communities in need. This aid is helping organizations and governments increase medical response capacity, address food insecurity, increase access to education in the face of school closures, protect impacted small businesses and provide support to the vulnerable populations.

Financial support is being dispersed to a number of organizations and programs such as the World Health Organization’s COVID-19 Solidarity Fund, the CDC Foundation, No Kid Hungry, Feeding America, National Centers for Disease Control and Prevention’s Emergency Relief Fund, the International Medical Corps and many other community-specific groups.

Forum members have been supporting their customers in a variety of ways, including by providing fee waivers, payment deferrals, and other assistance to help customers in need, with no negative credit bureau reporting for up-to-date clients.

Another key way in which large banks are serving households is the provision of safe, secure deposit accounts. 

People use deposit accounts as a safe store of value during uncertain times. With general economic uncertainty and an increase in market volatility, people are relying more on safe, liquid, bank deposits as they manage a variety of near-term risks. 

As people demand a safe store of value for their hard-earned money, Forum members have provided this critical service. Forum members provide depositors with a range of online services to access their deposits remotely, which are all the more valuable as people practice social distancing. 

Since the start of the crisis, <a href="https://www.bnymellon.com/us/en/insights/content-series/covid-19.html">Bank of New York Mellon</a> has worked to support its employees and their families with a number of actions and programs. The bank has provided paid leave benefits and an Employee Assistance Program for all employees and their direct family members, including a 24/7 COVID-19 support line. It is providing enhanced U.S. healthcare coverage so that COVID-19 testing and related outpatient services are provided without any employee out-of-pocket expense. The firm has also provided a 2-for-1 match for employee donations.

Forum members are actively helping ensure the health and well-being of their more than 720,000 employees. 

From special compensation awards, to additional time off, to counseling services, the nation’s largest banks have been taking significant steps to support their workforces.

In 2020, Forum member institutions:<ul><li>Increased credit to businesses and households by $785 billion to nearly $8.3 trillion.</li><li>Helped raise $2.2 trillion in corporate bonds and $339 billion in equity through the third quarter for U.S. companies, allowing them to continue to pay their workers, operate their businesses and meet their funding needs. This capital raising by large banks fulfills a critical need in the economy to connect savers, such as pension funds and endowments, with companies like Pfizer and 3M that need to borrow capital for everyday business needs. <a href="https://www.fsforum.com/types/press/blog/building-bridges-between-savers-and-borrowers-during-the-pandemic-large-bank-underwriting/">Read more</a>.</li><li>Remained strong and resilient, despite the significant headwinds. The members of the Financial Services Forum in 2020 increased capital and strengthened their liquidity positions while at the same time supporting business and consumers.</li></ul>

Forum member institutions have been a key source of support for the economy during the pandemic. They have supported the economy in a number of important ways.



Throughout the pandemic, we facilitated $94 billion in PPP loans to nearly 1.25 million small businesses across the country.

COVID-19 Response

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<ul><li>We hold more than $4.2 trillion in loans, accounting for 40% of total lending to businesses and households.</li><li>We provide more than $679 billion, or nearly half, of all consumer loans by banks in the U.S., supporting everything from the purchase of a new car to furnishing a new home.</li><li>Lending by our institutions accounts for 34% of total commercial and industrial (C&amp;I) lending by banks, helping businesses grow and contribute to the economy.</li><li>We represent a major source of lending to small businesses in communities across the country, holding $126 billion in small business loans&nbsp;and allowing the economy to grow at both a local and national level.</li><li>We also collectively meet nearly three-quarters of the bank funding needs of other financial institutions, supporting community banks, insurance companies and mortgage finance companies, for example, which then provide important services to businesses and households.</li></ul>

Our institutions lend to consumers, businesses and other financial institutions, promoting savings and investment that positions individuals and entities at all layers of the U.S. economy for resiliency and success. At the same time, we are supporting consumers, governments, and businesses of all sizes in growing and creating American jobs.

<ul><li>We underwrite nearly three-quarters of debt and equity transactions – such as initial public offerings – among large institutions in the U.S., providing a critical service that other U.S. institutions cannot offer on a similar scale.</li><li>With $4.2 trillion of mutual funds and annuities under management, we support the retirement and other savings needs of many Americans.</li><li>We finance a significant portion of state and local government expenditures for vital projects, like hospitals, roads, bridges, and schools, through $120 billion in municipal securities holdings. Additionally, we support a large portion of federal government expenditures through $1.1 trillion in U.S. Treasury securities holdings.</li></ul>

Our institutions help foster deep and liquid capital markets, ensuring the U.S. government and private institutions are able to effectively finance public spending and investments in the real economy. 

Our institutions collectively employ more than 750,000 people, offering a variety of benefits and opportunities to help our employees achieve their personal and professional goals.

Forum members increased credit to businesses and households by 10%
to nearly $8.3 trillion in 2020.


Essential to the U.S. Economy    

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Forum members have long been on the frontlines in the effort to bring unbanked and underbanked Americans into the financial mainstream. In particular, Financial Services Forum members were founding bank partners in a pilot program to provide low-cost, low-fee checking accounts, known as BankOn accounts, nearly a decade ago. There are now 12 million BankOn accounts at Forum member banks across the country. Our members will continue to be leaders in this effort to bring even more households into the banking system so they can help secure their financial future.

Forum members are playing a leading role in promoting affordable housing throughout the country. In 2023, Forum banks created or preserved nearly a quarter of a million affordable housing units.

We are supporting hundreds of Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) by providing over $11.5 billion in capital and financing since the beginning of 2020.

Our members recognize that talent from all backgrounds bolsters competitiveness, and leads to better results for consumers, clients, and communities. Forum members are committed to providing opportunities to workers from across the country and fostering their success through professional development, networking, and support programs. 

We invested more than $11.5 billion in Community Development Financial Institutions since the beginning of 2020. 

Economic Opportunity for all Americans

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In the real-life stress test of the pandemic, the largest banks have been resilient and increased lending to people and small businesses to move the country forward. This strength has allowed us to support businesses, households, and communities with $9.3 trillion in credit (an increase of $1.48 trillion since the beginning of the pandemic) and fund states and localities to build and upgrade vital infrastructure, like hospitals, schools, roads, and bridges.

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