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Forum CEO Urges Improvements to Bank Capital Framework to Support American Families, Small Businesses, and Economy
In testimony before a House Subcommittee, Forum CEO Amanda Eversole highlights the economic benefits of reforming regulatory structure
Washington, D.C. – Financial Services Forum President and CEO Amanda Eversole is testifying before the House Financial Services Subcommittee on Financial Institutions on the need for a rational review of the current bank capital framework, and the benefits reform would have for American families, small businesses and the economy.
Read key excerpts from Eversole’s remarks as prepared for delivery:
“The U.S. GSIBs have never been more capitalized and more resilient. They are subject to the most stringent regulatory standards among both U.S. and foreign competitors. Over the past 15 years, U.S. GSIBs have tripled their capital and now maintain more than $1 trillion in high-quality capital.
“But more capital isn’t always better—there are economic tradeoffs to higher requirements. According to academic research, a 3% increase in required capital can cost the U.S. economy $100-$150 billion per year. It is critical we get the balance right.
“After years of post-crisis implementation, now is the time to modernize the large bank capital regime so U.S. banks can better support American families, small businesses, and our capital markets.
“There are three important factors that should be considered as this committee explores this issue further.
“First, capital requirements must be supported by data and calibrated accordingly.
“Second, several aspects of the large bank capital framework make it harder for U.S. banks to compete, pushing activity to foreign banks and less regulated non-banks.
“Third, enhanced transparency and public accountability is a bedrock principle of good government.
“Now is the time to modernize capital requirements so we can unleash our full economic potential, boost lending to small businesses and consumers, and drive America’s economy forward.”
Full testimony as submitted for the record is available here.
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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 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.
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