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Banks Respond to Executive Order to Promote Financial Services AccessWashington, D.C. – The Bank Policy Institute, American Bankers Association, Consumer Bankers Association and Financial Services Forum issued a statement today responding to President Donald Trump’s Executive Order to promote access to financial services in America."Today's Executive Order helps ensure all consumers and businesses are treated fairly, a goal the nation's banks share with the Administration. It's in banks’ best interest to take deposits, lend to and support as many customers as possible. Unfortunately, regulatory overreach, supervisory discretion and a maze of obscure rules have stood in the way as the E.O. makes clear. We thank the Administration for its efforts to protect access to banking and rein in runaway regulations and look forward to working with the White House, Congress and the agencies to create a national standard that advances these goals.”Additional Background:Today’s executive order aligns with the spirit of several ongoing efforts on Capitol Hill and among the financial institution regulatory agencies to address bank account access concerns driven by regulatory and supervisory overreach. A sample of those efforts includes:<ul><li>The FIRM Act. Sponsored by Senate Banking Committee Chairman Tim Scott (R-SC) in the Senate and Reps. Andy Barr (R-KY) and Ritchie Torres (D-NY) in the House, would help refocus supervision on material risks and objective metrics by prohibiting the prudential banking agencies from considering reputational risk in supervisory actions.</li><li>Elimination of Reputational Risk in Exams. The Office of the Comptroller of the Currency (<a href="https://www.occ.gov/news-issuances/bulletins/2025/bulletin-2025-4.html">March 2025</a>) and Federal Reserve (<a href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20250623a.htm">June 2025</a>) announced they would eliminate reputational risk as part of the bank examination process. The FDIC has <a href="https://www.fdic.gov/news/speeches/2025/view-fdic-update-key-policy-issues">also signaled</a> that it plans to move forward with a rulemaking taking similar action (April 2025).</li><li>The FAIR Exams Act. Sponsored by Chairman French Hill (R-AR), seeks to establish a fair process for banks to appeal supervisory decisions, require regulators to complete examinations in a timely manner and create an independent office to apply much-needed accountability to supervision.</li><li>The HUMPS Act. Sponsored by Rep. Scott Fitzgerald (R-WI), would increase transparency in financial institution supervision and work toward reforming the subjective CAMELS rating system.</li><li>The SAFE Guidance Act. Sponsored by Rep. Dan Meuser (R-PA), would ensure transparency and limit abuse of regulatory “guidance” by requiring financial agencies to include a clear disclaimer on the first page of any guidance document. This disclaimer must state that such guidance does not carry the force of law and that noncompliance does not constitute a legal violation.</li></ul>Fair Access Principles:As policymakers work to implement the President’s Executive Order, they should consider <a href="https://fsforum.com/a/media/joint-trades-federal-fair-access-principles.pdf">these principles</a> to promote and preserve risk-based decision-making. Importantly, federal requirements must broadly and expressly preempt any non-federal fair access or account closure laws to avoid inconsistent requirements impacting customers across all 50 states.Learn More<ul><li><a href="https://fsforum.com/news/forum-statement-on-federal-reserve-s-removal-of-reputation-risk">Forum Statement on Federal Reserve’s Removal of Reputation Risk</a>&nbsp;– 6/23/25</li><li><a href="https://www.aba.com/about-us/press-room/press-releases/federal-reserve-announcement-reputational-risk">ABA Applauds Federal Reserve Announcement on Reputational Risk</a> – 6/23/25</li><li><a href="https://fsforum.com/news/forum-applauds-house-committee-passage-of-measures-to-improve-bank-supervision">Forum Applauds House Committee Passage of Measures to Improve Bank Supervision</a>&nbsp;– 5/21/25</li><li><a href="https://bpi.com/bpi-statement-on-house-financial-services-committee-markup/">BPI Statement on House Financial Services Committee Markup</a> – 5/20/25</li><li><a href="https://fsforum.com/news/financial-services-forum-commends-introduction-of-the-bipartisan-financial-integrity-and-regulation-management-act">Financial Services Forum Commends Introduction of the Bipartisan Financial Integrity and Regulation Management Act</a>&nbsp;– 4/9/25</li><li><a href="https://www.aba.com/about-us/press-room/press-releases/applauds-occ-announcement-on-reputation-risk">ABA Applauds OCC Announcement on Reputation Risk</a> – 3/20/25</li><li><a href="https://bpi.com/bpi-response-to-occs-decision-to-cease-examinations-for-reputation-risk/">BPI Response to OCC’s Decision to Cease Examinations for Reputation Risk</a> – 3/20/25</li><li><a href="https://fsforum.com/news/forum-statement-on-occs-removal-of-reputation-risk">Forum Statement on OCC’s Removal of Reputation Risk</a>&nbsp;– 3/20/25</li><li><a href="https://www.aba.com/about-us/press-room/press-releases/senate-banking-committee-markup">ABA Statement on Senate Banking Committee Markup</a> – 3/13/25</li><li><a href="https://fsforum.com/news/forum-applauds-senate-banking-committee-passage-of-financial-integrity-and-regulation-management-act">Forum Applauds Senate Banking Committee Passage of Financial Integrity and Regulation Management Act</a>&nbsp;– 3/13/25</li><li><a href="https://fsforum.com/news/financial-services-forum-commends-chairman-scott-for-introducing-the-financial-integrity-and-regulation-management-act">Financial Services Forum Commends Chairman Scott for Introducing the Financial Integrity and Regulation Management Act</a>&nbsp;– 3/6/25</li><li><a href="https://bpi.com/bpi-statement-on-president-trumps-remarks-on-debanking/">BPI Statement on President Trump’s Remarks on ‘Debanking’</a> – 1/23/25</li></ul>###Media ContactsAustin AntonBank Policy Institute<a href="mailto:austin.anton@bpi.com">austin.anton@bpi.com</a>&nbsp;Jeff SigmundAmerican Bankers Association<a href="mailto:jsigmund@aba.com">jsigmund@aba.com</a>&nbsp;Weston LoydConsumer Bankers Association<a href="mailto:wloyd@consumerbankers.com">wloyd@consumerbankers.com</a>&nbsp;Laura PeaveyFinancial Services Forum<a href="mailto:lpeavey@fsforum.com">lpeavey@fsforum.com</a>&nbsp;&nbsp;About the Bank Policy InstituteThe Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.About the American Bankers AssociationThe American Bankers Association is the voice of the nation’s $24.5 trillion banking industry, which is composed of small, regional and large banks that together employ approximately 2.1 million people, safeguard $19.5 trillion in deposits and extend $12.8 trillion in loans.About Consumer Bankers AssociationThe Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on X @consumerbankers.&nbsp;About the Financial Services ForumThe 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.

Banks Respond to Executive Order to Promote Financial Services Access

Dear reader,In this issue, we spotlight one of our member institution’s perspectives on improvements to a significant part of the large bank capital framework and what they could mean for the functioning and strength of the vital U.S. Treasury market.&nbsp;&nbsp; Fifteen years post-crisis, much of our large bank capital regime has largely gone unexamined and no longer reflects the realities of our financial system and the needs of our economy.&nbsp; An update to the leverage capital ratio is one of several important areas of reform.On a personal note, this will be my final Forum File. It’s been a privilege to share these updates with you, and I’m gratified by the continued accomplishments of the institutions represented by the Financial Services Forum. &nbsp;Thanks for your interest in the work of this organization and its members. &nbsp;Kevin Fromer, President and CEO, Financial Services Forum<h2>Penny For Your Thoughts</h2>Tiffany Eng, Global Treasurer for BNY<h3> Regulators are revisiting leverage ratios to improve Treasury market resilience. From your vantage point as Global Treasurer, what’s the key issue at stake here?</h3>At its core, this is about ensuring the Treasury market remains liquid and resilient, especially in times of stress. The Treasury market plays a critical role in the global financial system — not only are Treasuries used as collateral and for liquidity management, but they also underpin close to $1 trillion in cash and $5 trillion in financing transactions daily. When we think about regulatory frameworks like the SLR or Tier 1 leverage ratio, we’ve seen they can inadvertently disincentivize Treasury market intermediation when it’s needed most— during periods of elevated volatility. It’s increasingly important during these periods of stress that banks can provide liquidity and ensure the Treasury market functions in an orderly manner, when banks act as shock absorbers for both cash and Treasuries.So the key issue is whether the current leverage rules are overly binding on cash and Treasuries, particularly in crisis scenarios when deposit balances may rise and Treasury intermediation is needed, limiting banks’ ability to support markets that rely on us.<h3>There’s an ongoing debate — should regulators lower leverage ratios across the board, or take a more targeted approach excluding safe assets like reserves and Treasuries? What’s your view?</h3>This is not a binary choice. Each option addresses different aspects of the issue. Lowering leverage requirements overall helps ease constraints and re-establishes leverage ratios as a backstop rather than a binding constraint. But banks could use that additional capacity for any number of purposes, not necessarily Treasury market intermediation, and that capacity – if already re-allocated by banks - may not be available in a time of stress.A more targeted fix — excluding cash reserves, Treasury repos, or bills — would directly improve the capacity to support cash and Treasury market liquidity. That’s particularly helpful in periods of stress when you need intermediaries to step in and balance markets. My view is that a combination of approaches, along with tools like the standing repo facility and central clearing enhancements, is likely the most effective and prudent path forward.<h3>How should reforms be timed — should we wait for the next crisis to act, or take proactive measures?</h3>The Treasurer’s mindset is always to prepare, not predict. We’re constantly managing across a wide set of risks — capital, liquidity, interest rate — and stress-testing our position against many different scenarios. It’s much more impactful to put structural and permanent solutions in place now, before stress conditions materialize. That way, we foster the right behaviors and reduce reliance on temporary or emergency measures later on.We don’t position our balance sheet assuming regulators will step in during a crisis. Instead, we plan with the regulations as they exist today. From that perspective, reforms that provide clarity and durability are more effective and help to ensure that the banking sector can continue to function as a source of stability.<h3>What principles should guide leverage ratio reform from a long-term perspective?</h3>The most important principle is that policy should be targeted to the problem we’re trying to solve. Leverage ratios are one piece of a larger prudential framework — they provide a backstop but aren’t well-suited to capture liquidity risk or interest rate risk. Reforming any single measure in isolation risks making another constraint more binding, without addressing the underlying structural issue.That’s why I support a holistic, resilient approach. Reforms should support both safety and liquidity in the Treasury market — which is the world’s premier government bond market — while reinforcing sound, risk-based management practices. As the market grows, our regulatory frameworks should evolve too, allowing banks to serve as resilient intermediaries through all conditions.<h2>Value Add</h2>BNY’s Enduring Commitment to Pittsburgh<figure class="image image_resized" style="width:80.53%;"><img src="https://fsforum.com/a/media/bny-ff-office.png"></figure>BNY continues to demonstrate its long-term commitment to Pittsburgh through the renovation and expansion of its campus in the city—one of six strategic global locations for the company and its largest employee base in North America. This investment reflects a broader dedication to supporting clients, empowering employees, and strengthening ties with the local community.Pittsburgh has long played a central role in shaping American industry and innovation, from steel production to the emerging frontier of artificial intelligence. It is also where Mellon Financial—founded more than 150 years ago by Judge Thomas Mellon and his sons—laid the groundwork for what would become a leading global financial institution.Today, BNY’s presence in Pittsburgh spans all lines of business, serving over 500 regional clients.&nbsp; Its campus plays a key role in advancing the firm’s artificial intelligence capabilities—driving efficiencies, enhancing client service, and powering the future of finance.&nbsp; The firm is also a major employer of graduates from local universities, including Carnegie Mellon, Pitt, Penn State, and Duquesne, and supports alternative talent pathways through partnerships like Year Up. Over the past decade, BNY has donated $50 million to the region and maintains leadership roles across prominent civic organizations, reflecting a continued commitment to the city’s growth and vitality.Through continued investment in innovation, talent, and community, Pittsburgh remains a vital part of BNY’s long-term vision, both as a center of excellence and as a city where the future of finance continues to take shape.<h2>Capital Gains</h2>What we’re doing in WashingtonSupport for modernizing capital rules to better serve the U.S. economy gained more traction during the Federal Reserve’s recent conference on large bank capital requirements. See&nbsp;<a href="https://fsforum.com/news/icymi-support-for-bank-capital-requirement-reform-continues-to-build">key takeaways</a> from industry leaders and policy experts and check out our latest <a href="https://fsforum.com/a/media/capital-reform-for-the-largest-u.s.-banks.pdf">factsheet</a> outlining our capital reform priorities.In related news, &nbsp;Forum President and CEO Kevin Fromer <a href="https://fsforum.com/news/forum-welcomes-proposal-to-refine-large-bank-supervisory-ratings">welcomed</a> the Federal Reserve’s proposal to reform supervisory ratings for large banks, noting that these changes will “not only strengthen the oversight of large financial institutions, but also promote greater confidence among investors, consumers, and the broader economy.”<figure class="image image_resized" style="width:84.22%;"><img src="https://fsforum.com/a/media/fsf-social-forum_file-1-0725updates_quotenoimage.png"></figure>Additionally, the Forum <a href="https://fsforum.com/news/financial-services-forum-congratulates-jonathan-gould-on-confirmation-as-comptroller-of-the-currency">applauded</a> the Senate’s confirmation of Jonathan Gould as Comptroller of the Currency. “The Forum looks forward to working with Comptroller Gould and his team to advance policies that support consumers, businesses of all sizes, and America’s communities,” Fromer said.Looking ahead, the Forum is preparing for a leadership transition. After eight years of dedicated service, Kevin Fromer will be stepping down. We’re excited to <a href="https://fsforum.com/news/forum-names-amanda-eversole-president-and-chief-executive-officer">welcome</a> Amanda Eversole, Executive Vice President and Chief Advocacy Officer at the American Petroleum Institute, as our next President and CEO.<h2>Our Two Cents</h2>Research from the ForumThere’s been a lot of conversation around the proposed changes to the Supplementary Leverage Ratio (SLR) and what it could mean for bank capital levels. A new Forum analysis helps put those numbers in perspective.The proposal would reduce Tier 1 capital for large banks by about $13 billion— or just 1.4%. That might sound like a lot, but in the context of typical year-over-year shifts driven by regulation, market conditions, or banks’ own strategies, it’s a relatively small adjustment.To help illustrate this, we’ve included a chart showing how capital levels often fluctuate. The takeaway? This reform wouldn’t meaningfully lower the capital required for U.S. GSIBs.<figure class="image image_resized" style="width:88.83%;"><img src="https://fsforum.com/a/media/fsf-social-forum_file-1-0725_725_graph.png"></figure>&nbsp;Turning to broader regulatory developments, the latest posts of the BankNotes Blog feature key insights from the Forum research team:<ul><li><a href="https://fsforum.com/news/reflections-on-the-federal-reserve-s-integrated-review-of-the-capital-framework-for-large-banks">Reflections on the Federal Reserve’s Integrated Review of the Capital Framework for Large Banks</a>&nbsp;provides an even deeper dive into the discussions surrounding necessary reforms to the leverage ratio, GSIB surcharge, and stress testing framework.</li><li><a href="https://fsforum.com/news/a-level-set-on-the-proposal-to-reform-the-supplementary-leverage-ratio">A Level Set on the Proposal to Reform the Supplementary Leverage Ratio</a> highlights how the proposed SLR reform supports safer banking practices, maintains transparency, and doesn’t significantly reduce capital.</li><li><a href="https://fsforum.com/news/to-infinity-and-beyond-the-supply-of-safe-assets-and-gsib-capital-surcharges">To Infinity and Beyond? The Supply of Safe Assets and GSIB Capital Surcharges</a> explores how rising GSIB surcharges may be limiting U.S. banks’ ability to lend and compete—potentially hurting American consumers and businesses.</li></ul><h2>Checking the Balance</h2>Members in the newsBank of America’s&nbsp;Sports with Us Clinic in Los Angeles&nbsp;<a href="https://urldefense.com/v3/__https:/www.linkedin.com/posts/bank-of-america_bettermoneyhabits-activity-7348385141146181634-heFB/?utm_source=share&amp;utm_medium=member_desktop&amp;rcm=ACoAACmiWu4BwFZjjchdOS8BxnjLXmLgBgfAxCM__;!!I2XIyG2ANlwasLbx!VueMa5R_hcE4iFRaj-nLNkgfHRGtUJ5jDQzMnvXG8sT5eFJOF-ueJ5SsYRVNG1-x3kQ37gqO1fjTveyS$">teamed up</a>&nbsp;with local groups, including the Boys &amp; Girls Club, the Dodgers, the Rams, and former professional soccer player Mia Hamm to give young athletes a day of hands-on training and a boost in financial skills such as budgeting and resilience.To mark&nbsp;BNY’s&nbsp;241st birthday, employees around the world&nbsp;<a href="https://www.linkedin.com/posts/bnyglobal_pittsburgh-lifeatbny-activity-7345519801982697473-Rddi?utm_source=share&amp;utm_medium=member_desktop&amp;rcm=ACoAACmiWu4BwFZjjchdOS8BxnjLXmLgBgfAxCM">volunteered</a>&nbsp;their time to support local communities from Pittsburgh to Pune, India.Citi is <a href="https://www.bankingdive.com/news/citi-opening-charlotte-office-510-jobs-north-carolina/752586/">growing</a> its presence in Charlotte, North Carolina, with a new office that will bring 510 new jobs to the city’s expanding financial hub.Goldman Sachs&nbsp;is&nbsp;<a href="https://urldefense.com/v3/__https:/www.reuters.com/world/us/goldman-sachs-finances-270-million-affordable-housing-project-new-york-2025-07-15/__;!!O2kDR7mm-zSJ!o2fZGukag_0VEiQk546db3Cf93UnbYfJMExx4E2OkNiBYC1gabnWiVe1q2feEw_J2ApyotroaRbEZjA$">financing</a>&nbsp;a $270 million affordable housing project in the East New York neighborhood of Brooklyn—bringing 385 new apartments and a major boost to the community.JPMorganChase&nbsp;<a href="https://www.jpmorganchase.com/newsroom/press-releases/2025/jpmorganchase-18m-iff-chicago-midwest">announced</a>&nbsp;a $15 million loan and $3 million grant to the&nbsp;IFF&nbsp;to expand access to capital for nonprofits and power economic growth across Chicago and the Greater Midwest.In June, the&nbsp;<a href="https://linkprotect.cudasvc.com/url?a=https%3a%2f%2fbroadstreetimpact.com%2fabout%2fnews%2fnew-rural-investment-fund-is-leveraging-nmtcs-to-deploy-45-million-for-health-care-affordable-energy-and-quality-jobs&amp;c=E,1,eC5vf1M7tr9ek2rZGcQZ05eoWXZafXAl5rQnuBMj9wmaPiX-eMIUAyI_JKiqJBckeFzpJ7EzU3QKMOo-8IErYFDEPMrJNE1QXKtJv_nSt3Lkeiwmw3LCeb8,&amp;typo=1">Morgan Stanley Rural NMTC Fund</a>&nbsp;was announced to address persistent economic and health gaps in rural and tribal communities.&nbsp;Collaborating&nbsp;with Broadstreet Impact Services, the fund is leveraging federal New Markets Tax Credits (NMTCs) to invest $45 million in&nbsp;projects&nbsp;that&nbsp;deliver&nbsp;health care access, affordable and clean energy infrastructure, and living-wage job creation.State Street&nbsp;<a href="https://www.linkedin.com/posts/state-street_inclusiveeconomy-bostonxchange-activity-7351322745558704130-mtib/?utm_source=share&amp;utm_medium=member_desktop&amp;rcm=ACoAACmiWu4BwFZjjchdOS8BxnjLXmLgBgfAxCM">hosted</a>&nbsp;its first Boston XChange Demo Day, celebrating innovation with inspiring founders and a shared commitment to expanding economic opportunity in communities nationwide.Wells Fargo&nbsp;has been&nbsp;<a href="https://urldefense.com/v3/__https:/www.linkedin.com/posts/wellsfargo_wells-fargo-has-been-named-a-2025-celent-activity-7345481288998436864-4erb/?utm_source=share&amp;utm_medium=member_desktop&amp;rcm=ACoAACmiWu4BwFZjjchdOS8BxnjLXmLgBgfAxCM__;!!F9svGWnIaVPGSwU!obrX7uPkiHq9xzSv1NXycfi1h9Zpql_v1_8BulLS_Wz2owq8B1y6xtJnykhReT1qkWgAnK4ornxRDfCzQbTcLA$">named</a>&nbsp;a 2025 Celent Model Bank for transforming corporate digital banking through&nbsp;Wells Fargo&nbsp;Vantage℠, launched in 2022&nbsp;to meet the evolving digital needs of corporate and commercial clients.&nbsp;

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The Forum File, 2025 Edition #2

<h3>Introduction</h3>Recently, bank regulators issued a proposal to modernize the supplementary leverage ratio (SLR) after the Federal Reserve publicly <a href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210319a.htm">committed</a> to do so in 2021.&nbsp; The proposal contains an economic analysis showing that the impact of the proposal on institution-level capital is de minimis – required capital for all affected institutions would decline by less than two percent.&nbsp; One part of the economic analysis showed that narrow, bank subsidiary-level capital requirements would decline by a larger amount.&nbsp; The identified decline in narrow, bank subsidiary-level capital requirements has been cited by some to argue that the proposal would significantly weaken capital requirements.&nbsp; This interpretation confuses broad, institution-level capital requirements with narrow, bank subsidiary-level requirements and fails to understand how the two requirements relate to each other – both in theory and in practice.&nbsp; In this blog, we review the difference between institution-level and bank subsidiary-level capital requirements, discuss the economic relationship between these requirements, and empirically demonstrate that a reduction in bank subsidiary-level requirements not matched by a similar decline in institution-level requirements has no meaningful impact on an institution’s capital or resiliency.<h3>Bank Holding Companies (BHCs) and Banks</h3>What exactly is Bank of America?&nbsp; For that matter what exactly is JPMorganChase or Wells Fargo or any other large “bank” that people regularly engage with on a daily basis?&nbsp; Most people would likely respond - “well, I guess Bank of America is a bank.”&nbsp; And that’s right – sort of.&nbsp; Bank of America is actually a bank holding company, or “BHC.”&nbsp; The full name of “Bank of America” is actually Bank of America Corporation.&nbsp; Bank of America Corporation (BAC) is a large and diverse holding company that contains a bank (Bank of America, National Association, or “BANA”), a securities dealer (BofA Securities), an asset manager (Merrill Lynch), and a variety of other operating companies and subsidiaries that work in tandem to bring households, communities, and businesses a diverse range of important and valuable financial services.Why does this – admittedly Jeopardyish – technical distinction matter?&nbsp; It matters because the financial health and resilience of “Bank of America” refers to the health and resiliency of the entire corporation and not just “the bank.”&nbsp; Moreover, the holding company maintains capital that supports the resilience of the entire organization.&nbsp; When media outlets, bank analysts and others report on “the earnings of Bank of America,” “the capital of Bank of America,” or “the share price of Bank of America,” they mean the earnings, capital, and share price of the entire corporation (BHC) because that is the most comprehensive and economically relevant institution.<h3>BHC and Bank Capital Requirements</h3>Bank holding companies are regulated by the Federal Reserve.&nbsp; Banks are regulated at the Federal level by one of three regulators – the Office of the Comptroller of the Currency (OCC), the Federal Reserve, or the Federal Deposit Insurance Corporation (FDIC).&nbsp; Bank of America, National Association (BANA), for example, is regulated by the OCC.The Federal Reserve establishes capital requirements for all BHCs (Bank of America Corporation).&nbsp; Bank regulators establish capital requirements for banks (Bank of America, National Association).&nbsp; In general, the Federal Reserve’s BHC capital requirements are larger and significantly more stringent than bank subsidiary-level capital requirements set by bank regulators.&nbsp;For example, as of the first quarter of 2025, Bank of America Corporation had total assets of $3.3 trillion.&nbsp; In the same quarter, Bank of America, National Association, maintained total assets of $2.6 trillion.&nbsp; The Fed’s BHC capital requirements apply to all $3.3 trillion in assets while the bank subsidiary-level capital requirements only apply to the $2.6 trillion of assets on the balance sheet of the bank.&nbsp; Accordingly, BHC capital requirements are broader, institution-level capital requirements that support the safety and soundness of the entire financial institution.To further demonstrate the difference in bank holding company and bank subsidiary-level requirements, all banks are subject to a bank subsidiary-level (Tier 1) capital requirement of 8.5%, while BHC (Tier 1) capital requirements vary based on factors such as the result of the Federal Reserve’s annual stress test.&nbsp; The table below shows the difference between BHC and bank subsidiary-level capital requirements for Financial Services Forum members.<figure class="image"><img src="https://fsforum.com/a/media/7.29.25-blog-chart-part-2.jpg"></figure>Reviewing the table shows that Forum members are subject to significantly stricter capital requirements at the BHC level than at the bank subsidiary-level.&nbsp; On average, Forum members are subject to a capital requirement that is roughly four percentage points higher at the BHC level (12.6% vs 8.5%).&nbsp;What does this mean exactly?&nbsp; Imagine a BHC that only contained a bank.&nbsp; If the bank had total assets of $100, the BHC would be required to maintain $12.60 in capital while the bank would be required to maintain $8.50 in capital.&nbsp; Ultimately, how much capital is actually required?&nbsp; The institution must maintain the higher of the two amounts - $12.60.&nbsp; And herein lies the rub.&nbsp; When bank subsidiary-level capital requirements are eclipsed by stricter and more stringent BHC capital requirements, the bank subsidiary-level requirements become considerably less relevant.An analogy is of some use to fully contemplate the economic mechanism at play.&nbsp; Imagine that as a teenager you want to stay out late after Homecoming.&nbsp; Suppose Dad is a softie, and Mom lays down the law at home.&nbsp; Suppose further that Mom has a strictly enforced curfew of midnight while Dad will look past a return to the homestead in the wee hours of the morn’.&nbsp; Now imagine working over Dad before Homecoming and ultimately he relents and agrees that returning home at 1 a.m. is OK.&nbsp; Does this help?&nbsp; Not if Mom holds firm at a midnight curfew.&nbsp; The issue is exactly the same in the world of bank capital.&nbsp; Reducing a bank subsidiary-level capital requirement is of limited relevance if the more stringent BHC requirement is unaffected.Pointing to lower bank subsidiary-level capital requirements as a sign of a weaker capital regime is misleading because it ignores the important interplay between BHC and bank subsidiary-level requirements.&nbsp; It similarly ignores the fact that, for large banks, BHC capital requirements are more stringent, rendering reductions in bank subsidiary-level requirements considerably less relevant.<h3>BHC and Bank Subsidiary-Level Capital – What Do the Data Show?</h3>The discussion above makes the economic case for why a narrow focus on bank subsidiary-level requirements that ignores broader institution-level capital requirements is misguided.&nbsp; But what do the data say?&nbsp; Ultimately, we should corroborate the conceptual economic case with real world data.&nbsp;Consider the chart below that depicts aggregate (Tier 1) capital requirements at the BHC and bank subsidiary-level for Forum members.&nbsp; Each bar shows the requirement (grey) and the excess capital above and beyond the requirement (blue).&nbsp; At the narrow bank subsidiary-level, in 2024, Forum members maintained $914 billion in capital (grey+blue).&nbsp; The bank subsidiary-level requirement was – a much lower - $525 billion (grey).&nbsp; In aggregate then, Forum members were maintaining excess capital at the bank subsidiary-level of roughly $400 billion.&nbsp; At the broader BHC level, Forum members maintained roughly $1.1 trillion in capital while the BHC requirement was roughly $926 billion.&nbsp; In aggregate, Forum members maintained excess capital at the BHC level of roughly $175 billion.<figure class="image image_resized" style="width:82.07%;"><img src="https://fsforum.com/a/media/7.29.25-blog-part-3.png"><figcaption>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Source: Federal Reserve Y-9C, FFIEC Call Reports</figcaption></figure>A few things about this data are worth noting.&nbsp; First, as discussed, both capital maintained (grey + blue) and capital required (grey) are substantially higher at the BHC than at the bank.&nbsp; Second, and importantly, at the bank subsidiary level, banks are maintaining a significant amount of excess capital over and above the requirement of nearly $400 billion.&nbsp; At the BHC level, the amount of excess capital is much more modest at less than $200 billion.What explains the large difference in excess capital at the bank and BHC?&nbsp; Why, for example, doesn’t the bank simply reduce its excess bank subsidiary-level capital from $400 billion to, say, $100 billion?&nbsp; The answer is that doing so would run afoul of the stricter BHC requirement.&nbsp; Accordingly, banks regularly maintain significant excess capital at the bank subsidiary level to comply with stricter and more relevant BHC-level capital requirements.<h3>Conclusion</h3>Robust capital standards are an important safeguard for our financial system’s safety and soundness.&nbsp; The Federal Reserve’s recent proposal to modernize the Supplementary Leverage Ratio will not have an appreciable impact on institution-level bank capital.&nbsp; Claims that the proposal weakens bank capital standards are misguided because they conflate bank subsidiary-level and BHC capital standards and fail to recognize the important economic relationship between the two standards.&nbsp; BHC-level capital is a financial resource that supports the resilience of all the activities undertaken by the BHC.&nbsp; BHC-level requirements are more comprehensive and generally more stringent than bank subsidiary-level requirements.&nbsp; Accordingly, a narrow focus on bank subsidiary-level requirements is inappropriate when evaluating the health and safety of the banking and financial system. &nbsp;&nbsp;

The “Bank” Capital Shell Game: Would the Real Bank Capital Requirement Please Stand Up? 

<h2>Introduction</h2>Earlier this week, the Federal Reserve held a conference to consider the state of the capital regime for large banks.&nbsp; The event was excellent for several reasons.&nbsp; First, the event openly recognized the need to review, reconsider, and reform the large bank capital regime.&nbsp; Fifteen years post-crisis, much of the large bank capital regime has gone unexamined and has not kept pace with the realities of the banking sector or our economy.&nbsp; Second, the conference engaged a wide array of stakeholders with views from academics, industry experts, and former regulators.&nbsp; The conference neither unapologetically rationalized the existing framework, nor reflexively argued that the entire framework was faulty.&nbsp; Rather, the conference took a hard, introspective look at a capital framework that was engineered well over a decade ago and asked important and tough questions about how it can best serve our economy for the future.In this post, we provide some specific reactions to the conference that we hope can add to the public conversation about the future of the large bank capital regime.&nbsp; For the sake of brevity, our reactions are targeted and limited.&nbsp; Interested readers are invited to check out the entire conference on <a href="https://www.youtube.com/watch?v=zKh-6QvQfqA">YouTube</a> for the full presentations and discussions.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<h2>Leverage Reform</h2>One panel considered the case for leverage ratio reform.&nbsp; The panel broadly recognized the need for leverage reform given the significant changes to the economy and financial system since the supplementary leverage ratio (SLR) was introduced in 2015.&nbsp; Namely, post-COVID the level of bank reserves and U.S. Treasuries in circulation has expanded massively, making the SLR increasingly binding for large banks.&nbsp; The level of safe assets in today’s economy simply was not contemplated in 2015.&nbsp; Consequently, leverage ratios have moved from their intended roles as “backstops” to “frontstops,” dis-incentivizing a host of important bank activities such as intermediation in the U.S. Treasury market.One comment from the panel is noteworthy.&nbsp; Some commentary suggested that leverage ratios are needed because “risk-based requirements may be wrong.”&nbsp; This statement is undoubtedly true because all risk assessments are inherently uncertain.&nbsp; But the prescription that “we need leverage ratios” simply does not follow as a result.&nbsp; While risk-based requirements “may” be wrong, it is also the case that the capital requirement implied by a leverage ratio is “certainly wrong.”&nbsp; Accordingly, and somewhat glibly, two wrongs do not make a right.&nbsp; What then is the answer?&nbsp; If the risk assessments underlying risk-based requirements are uncertain and imperfect, regulators should invest time and attention to regularly review risk-based requirements in an open, transparent, and data-based manner.&nbsp; Constantly striving to improve a risk-based capital regime is always better than outsourcing capital requirements to an anachronistic and undoubtedly incorrect capital requirement.<h2>The Evolution of Capital</h2>One panel was devoted to the general question of “how did we get here” from a capital perspective.&nbsp; As discussed, the large bank capital regime that we have today was engineered well over a decade ago.&nbsp; And like most things in life, it has grown and changed over time for reasons that are, in many cases, unanticipated and unintended.&nbsp; Taking regular stock of the regulatory regime and asking, “how did we get here” and “does this still make sense today” is an excellent exercise that should be repeated with regularity.One critical point made during the panel relates to the current level of capital among large banks and the oft repeated refrain that reform should be “capital neutral.”&nbsp; An important fact to consider is that between the fourth quarter of 2020 and the fourth quarter of 2024, capital requirements for Forum members grew by eighteen percent, or by $125 billion.&nbsp; This observation is critically important to consider in the context of calls for “capital neutrality.”&nbsp;<figure class="image"><img src="https://fsforum.com/a/media/7.25.25-blog.png"></figure>As far back as 2019 Federal Reserve officials, including Chairman Powell, have publicly stated that large bank capital levels are “about right.”&nbsp; Against this backdrop, capital requirements for the largest banks have grown steadily.&nbsp; As a result, when suggesting that capital reform be “neutral” it is important to ask, “neutral relative to what capital level?”&nbsp; Simply calling for “capital neutrality” in an environment of steadily rising requirements is, at best, an incomplete prescription.<h2>GSIB Surcharge</h2>One panel was devoted to a requirement for Global Systemically Important Banks (GSIBs), the GSIB surcharge, which is an important capital requirement for Forum members.&nbsp; There was a clear recognition on the panel that since the GSIB surcharge was adopted in 2015, GSIB surcharges had “drifted” steadily upwards for reasons that were well-understood back in 2015.&nbsp; Policy inertia has resulted in a GSIB surcharge that no longer reflects any reasonable notion of “systemic risk” and is out of step with today’s banking and financial system.Two points from the panel are worth emphasizing.&nbsp;First, the U.S. is an outlier relative to the rest of the world.&nbsp; In 2015, the U.S. implementation of the GSIB surcharge was calibrated to be more stringent than the international standard.&nbsp; Over time, this excessive stringency has increased due to policy inaction.&nbsp; Moreover, there has been little to no discussion or rationalization of the increase in stringency relative to the international standard since 2015.&nbsp;<figure class="image"><img src="https://fsforum.com/a/media/7.25.25-blog-part-2.png"></figure>Second, the current structure and calibration of the GSIB surcharge will continue to result in mechanically rising capital levels for Forum members (U.S. GSIBs) until the framework is reformed.&nbsp; This is an issue we have raised in previous <a href="https://fsforum.com/news/to-infinity-and-beyond-the-supply-of-safe-assets-and-gsib-capital-surcharges">posts</a> as well as a more detailed <a href="https://fsforum.com/a/media/gsib_paper_6.2.25.pdf">research</a> paper.&nbsp; In particular, the gap between the capital requirements for U.S. GSIBs and smaller banks is wide and will continue to widen until the GSIB surcharge is reformed.&nbsp; Given the events surrounding the regional bank turmoil of 2023, it is entirely fair to question whether a widening of the gap in capital between U.S. GSIBs and other banks is sensible policy.&nbsp; Finally, it should be noted that GSIB surcharges are continuing their unabated upward march.&nbsp; Specifically, several Forum members will see increased GSIB surcharges beginning in January of 2026 given the mechanical and backward-looking nature of the GSIB surcharge rule.&nbsp; Regulators should consider halting any oncoming increases to GSIB surcharges until after the GSIB surcharge rule has been reformed.&nbsp;<h2>Stress Tests</h2>Like other elements of the large bank capital regime, the stress tests were born during the crisis under a specific set of stressful and unique circumstances.&nbsp; Since that time, little has been done to reconsider and rationalize the existing system.&nbsp; Recently, however, the Federal Reserve has embarked on an important project to reconsider and reform the stress testing process.&nbsp; The effort should be applauded and supported.One issue that was discussed on the stress testing panel was the use of so-called “Pillar II” capital requirements to implement stress testing requirements as is done in the UK and Europe.&nbsp; In a nutshell, Pillar II requirements are essentially capital requirements that are determined through supervisory discretion with some input from the banks being regulated.The Pillar II approach was described by some as a more nuanced and flexible approach to using stress tests to calibrate large bank capital levels.&nbsp; This reasoning is highly problematic.&nbsp; Such an approach is at direct odds with the reform program that has already been announced by the Federal Reserve to provide more transparency on the stress tests.&nbsp; Also, a Pillar II approach preserves, and indeed would codify, a key flaw with the existing stress testing program: opacity.&nbsp; Capital requirements that are prescribed by supervisors based on their own private view of a bank’s resiliency, no matter how well informed, are inherently opaque.&nbsp; And opaque regulation invites policy volatility as policy views change with changes in political and regulatory leadership.&nbsp; Finally, even if banks themselves have some insight and agency in the setting of such Pillar II requirements, the public is kept completely in the dark.&nbsp; As a result, the information provided by the stress test would become significantly less informative and useful to the public.<h2>Conclusion</h2>This week’s capital conference at the Federal Reserve marked an important step forward in modernizing the large bank capital regime.&nbsp; In the marketplace of ideas, this conference provided much food for thought that will surely prove helpful to regulators as they chart the course ahead.&nbsp; Now, the onus is on the regulatory community to take these ideas and move forward deliberately and expeditiously with capital reform.&nbsp; As this happens, regulators should continue their public outreach to assess their progress and strive to ensure safety and stability while promoting economic growth.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;

Reflections on the Federal Reserve’s Integrated Review of the Capital Framework for Large Banks

Press Releases

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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.

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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.

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Commitment to Affordable Housing

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.

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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.

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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. 

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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 

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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.



COVID-19 Response

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