Federal Reserve Governor Bowman: Plans to slightly lower capital requirements for large banks

Federal Reserve Vice Chair for Supervision Bowman said on Thursday that capital requirements for large banks will decrease slightly following revisions to a comprehensive set of bank capital rules, a major victory for Wall Street banks that successfully resisted earlier drafts proposing capital increases. Bowman outlined adjustments to the Basel Accords and the Global Systemically Important Banks (GSIB) surcharge, rules that determine how much capital banks need to set aside to absorb potential losses. She stated that by “reasonably calibrating” existing rules, the overall capital requirements for large banks will decrease “slightly.” She added that these adjustments will eliminate overlapping regulatory standards and better align capital requirements with banks’ actual risks, while acknowledging a bias in the practice of continuously increasing banks’ loss buffer capital in recent years. (Jinshi)