Higher Capital Requirements Would Harm “Everybody Across the Economy”
Financial Services Forum CEO underscores the economic costs of proposed capital requirements in interview with Bloomberg TV
Washington, D.C. – Financial Services Forum President and CEO Kevin Fromer joined Bloomberg TV today to discuss the negative impacts of the Basel III Endgame proposal, which would increase bank capital requirements. Fromer’s comments came a day before the eight CEOs of the nation’s largest banks are scheduled to testify before the Senate Banking Committee on Banking, Housing, Urban Affairs.
“It will have a significant impact on consumers and small businesses and corporate customers, farmers, everybody across the economy. Everybody that does business and relies on these institutions for that work and the economy as a whole that relies on these institutions,” Fromer said.
Forum CEO Kevin Fromer Discusses Capital Regulation with Bloomberg TV
Following are highlights from the interview:
On the Strength of the Largest U.S. Banks and Lack of Consensus that More Capital is Needed:
“There is no evidence we need more capital in these institutions now,” Fromer said. “We have been through many, many years of activity where these institutions have encountered everything you can throw at them and they have been operating with more than enough capital to deal with all these things.”
On the Migration of Risk in the Financial System:
“It will affect the pricing or the economics, or it will move the activity outside of the regulator banking sector altogether. We have seen that secular trend for a long time,” Fromer said. “That does not mean the risk went away. It just leaves the banking system and goes to another part of the financial system.”
Please see the Forum’s fact sheet for more information on capital and the largest U.S. banks and the potential impact of the regulators’ capital proposal.
Learn more, including what policymakers and others have to say about the strong capital positions at the largest U.S. banks, at smartbankcapital.com.
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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.
Visit our website: fsforum.com