Powell: The Federal Reserve must focus on ensuring the stability of key areas for large banks
Federal Reserve Chairman Jerome Powell stated that the Federal Reserve's regulatory practices should focus on ensuring the safety and soundness of large banks. He emphasized that large banks need to have sufficient capital and manage risks properly, while the Federal Reserve is improving capital rules for large banks. Powell called for a public assessment of regulatory rules and expressed a desire to hear new ideas for improving the capital framework to ensure effective coordination among all parts
According to the Zhitong Finance APP, Federal Reserve Chairman Jerome Powell stated on Tuesday that the Fed's regulatory practices "must focus on key areas that determine safety and soundness." In his opening remarks at a regulatory meeting related to the comprehensive review of the capital framework for large banks held in Washington, Powell said, "We need our large banks to have sufficient capital and to manage their key risks properly."
Powell made these remarks as the Fed is finalizing capital rules for large U.S. banks, known as the final rules of the Basel III framework. Regulators have been criticized for the proposed rules being too strict and overly limiting banks' lending capabilities.
Powell stated, "We need large banks to be able to compete freely with each other, with non-bank financial institutions, and with banks in other jurisdictions to provide capital and support economic growth." He also emphasized that the central bank needs to openly assess banking regulatory rules, "The Fed is a dynamic institution. We are willing to listen to new ideas and feedback on how to improve the capital framework for large banks."
Powell pointed out that the benefit of this meeting is the ability to "consider all components of the capital framework comprehensively, rather than examining them in isolation. We need to ensure that the various parts of the capital framework can work effectively together."
