House Republicans to Quarles: Recalibrate Capital Surcharge

Several Republican members of the House Financial Services Committee last week urged Federal Reserve Vice Chairman for Supervision Randal Quarles to recalibrate the Fed’s capital surcharge for the largest U.S.-based global systemically important banks. Led by Reps. Andy Barr (R-Ky.) and Blaine Luetkemeyer (R-Mo.), the representatives argued that the surcharge — which is higher than required under the Basel capital accords — is harming U.S. banks’ international competitiveness.

Adopted in 2015 and fully phasing in by the end of this year, the capital surcharge applies to the eight U.S. institutions designated as GSIBs by the Switzerland-based Financial Stability Board. “We believe it is imperative that the Federal Reserve recalibrate the surcharge now,” the lawmakers said. “Doing so would promote economic growth and bring efficiencies to the post-crisis regulatory framework.”