HFSC Holds Hearing on Basel III Capital Proposal

On September 14, the House Financial Services Committee (HFSC) held a Subcommittee hearing on Financial Institutions entitled, “Implementing Basel III: What’s the Fed’s Endgame?” The hearing focused on the recent proposed rulemaking from prudential regulators that would increase the capital requirements for banking institutions. Republicans, ahead of the hearing, submitted a formal request to the regulators to withdraw their proposal entirely. During the hearing, Republicans largely scrutinized the proposal arguing it will inhibit lending activity and noted the release lacks and an adequate cost and benefit analysis. Democrats agreed with the proposal’s objective to ensure that, among other things, banks hold sufficient capital for unrealized losses but fell short of expressing full support.

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