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“There is no compelling case to increase capital requirements at the largest banks,” Forum CEO says
Washington, D.C. – Financial Services Forum President and CEO Kevin Fromer issued the following statement today on large bank capital:
“We look forward to seeing the conclusions drawn from the Federal Reserve’s holistic capital review. The banking system has evolved significantly from the financial crisis. Capital levels at our largest banks are at historic highs. Indeed, the nation’s largest banks have performed well in repeated government stress tests – which assume no government support – and in the real-life stress test of the pandemic.
“There is no compelling case to increase capital requirements at the largest banks, which would raise the costs of lending for families and businesses, hinder U.S. economic growth, and further push activity outside of the regulated financial sector. Regulators must carefully consider the economic impact of capital requirements, because they affect the whole economy, not just banks.”
Background:
Capital requirements for the eight U.S.-based Global Systemically Important Banks (GSIBs) that comprise the Forum have increased substantially and are continuing to rise. Since 2009, Forum members have increased their Tier 1 capital by 49 percent from $655 billion to $979 billion. This strength positioned them during and after the pandemic – a real-life stress test – to support individuals, small businesses, major companies, and communities across the country.
Read more about capital at the nation’s largest banks in this fact sheet and in the Forum’s BankNotes blog series, including the latest post, Don’t Paint the House Before Finishing the Roof: Basel III Finalization and the Large Bank Capital Regime.
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The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of 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.