A coalition of business trade organizations, including the Consumer Bankers Association (CBA), are urging regulators to update large bank capital requirements to support consumers, businesses, and the economy.
The coalition, which made a statement before the House Financial Services Committee on Dec. 2, noted the negative impact of “inappropriately calibrated” capital requirements.
Further, the coalition cited a review of 13 economic studies that found that increased capital requirements can cost the economy $100 billion to $150 billion per year. In addition, they said it can result in $2.3 trillion in lost economic productivity over 30 years.
“We greatly appreciate the work being undertaken by bank regulators to modernize capital rules to unleash economic growth and support various industries and sectors across the country. Specifically, common sense adjustments to Basel III Endgame, the GSIB Surcharge, stress testing, and leverage requirements will improve access to credit and reduce the costs of goods and services for American businesses and consumers, ensuring the U.S. economy can continue to thrive and grow,” the trade organizations said.
The statement was signed by the Financial Services Forum, American Bankers Association, American Cotton Shippers Association, American Farm Bureau Federation, Bank Policy Institute, Business Roundtable, Commodity Markets Council, Consumer Bankers Association, Futures Industry Association, International Swaps and Derivatives Association, Mortgage Bankers Association, National Association of Manufacturers, National Association of Realtors, The Real Estate Roundtable, Securities Industry and Financial Markets Association, and the U.S. Chamber of Commerce.
“It has been more than 15 years since the implementation of heightened bank regulation, and it is important to take a comprehensive look to ensure capital rules are working in today’s economy as intended without constraining U.S. economic growth and competitiveness around the globe for the future. Now is the time to modernize our capital framework to unleash economic growth for American businesses and consumers across the country,” the statement concluded.