Federal Reserve Vice Chairman for Supervision Michael Barr said today that regulators expect “broad and material” changes are coming to the proposed Basel III endgame capital standards, Bloomberg News reported. Speaking at a University of Michigan event, Barr echoed Fed Chairman Jerome Powell’s March 6 testimony before the House Financial Services Committee, in which he told lawmakers that significant changes will likely be made before the rule moves forward. Barr is the chief proponent of the proposal.
“I am working very closely with Chair Powell and other members of our Federal Reserve board to try to reach a broad consensus,” Barr said, according to Bloomberg. Specifically, he said criteria related to operational, market and credit risks could be adjusted.
The proposed standards have met resistance from lawmakers from both parties as well as the American Bankers Association and a host of interests both inside and outside the banking industry. A February analysis by the law firm Latham and Watkins found that 97% of public comments the Fed received on the proposal either opposed it or raised concerns. Opponents included manufacturers, the energy sector, agricultural interests, small businesses, medium and large corporations, real estate companies and mortgage stakeholders, market infrastructure providers, exchanges and insurers, and academics. ABA has called for the proposal to be withdrawn and re-proposed before being finalized.
