The Federal Deposit Insurance Corporation (FDIC) has indicated bank regulatory agencies are requesting comment on a proposal increasing banking system strength and resilience.
According to the FDIC, the proposal would modify large bank capital requirements to reflect underlying risks and increase the consistency of how banks measure their risks, implementing the final components of the Basel III agreement, also known as the Basel III endgame.
The proposal also seeks to strengthen the banking system via application of a broader set of capital requirements to more large banks. The proposed guidance would generally apply to banks with $100 billion or more in total assets.
The Federal Reserve Board has requested comment on a proposal that would make certain adjustments to the calculation of the capital surcharge for the largest and most complex banks.
Bank Policy Institute President and CEO Greg Baer issued a statement regarding the Basel proposal maintaining the proposal would unnecessarily increase the amount of required capital for banks.
“The dramatic capital increases proposed reflect a bad deal cut in Basel without public transparency or Congressional input, with an addition of unnecessary layers of capital solely for banks operating in the United States,” Baer noted.. “A proposal of this magnitude requires a robust and thorough economic analysis, which this one lacks. The proposal would make the United States the only major banking center where credit risk for capital purposes is assessed solely by federal regulators and not with agency-supervised bank models or use of external credit ratings.”