Fed’s Barr unveils sweeping revisions to bank capital plan after rejections and delays By Reuters

NEW YORK (Reuters) – The Federal Reserve’s regulatory chief on Tuesday outlined a sweeping overhaul to relax two major draft bank capital rules, following intense industry opposition that has delayed the projects and fueled divisions among federal regulators. top banking regulation.

Shares of major US banks fell after Fed Vice Chairman for Supervision Michael Barr unveiled the plan for the so-called Basel bank capital increase.

Here are the industry comments:

BANK OF AMERICA CEO BRIAN MOYNIHAN (During BARCLAYS GLOBAL FINANCIAL SERVICES FORUM)

“We’re fine. We can continue to buy back stock. Now, on the other hand, you’ve had successive Federal Reserve chairmen saying that capital is right in the industry, and all of a sudden we need more capital. If our capital goes up 10 %, prevents us from making $160 billion in loans that we would otherwise make. These loans would go to small businesses and middle-market companies at competitive rates.”

CHRIS STANLEY, HEAD OF MOODY’S BANKING INDUSTRY PRACTICE:

“We are close to an election, which will slow progress, but the Basel Endgame and GSIB Surcharge rules will survive, no matter who wins.”

STEPHEN BIGGAR, BANKING ANALYST, ARGUS RESEARCH:

“That’s less than half the percentage increase that was proposed, but it’s disappointing to see the bank share price react negatively. The Street may have been looking for a bigger cut from the original proposal.”

KEVIN FROMER, CHAIRMAN, FINANCIAL SERVICES FORUM (In a statement):

“It is essential that capital regulations avoid unnecessary and harmful effects on the US economy. The revisions should comprehensively address the concerns that have been raised by a wide range of commenters citing the likely costs to families and businesses of all sizes. Agencies should also provide a detailed quantitative analysis and policy justification.

“We look forward to reviewing the revisions and fully participating in the public comment process. Getting this right is critical to the U.S. economy.”

JPMORGAN CHAIRMAN CHASE DANIEL PINTO (During BARCLAYS GLOBAL FINANCIAL SERVICES FORUM)

“Obviously 10 is better than 20. So that’s good. The problem is we have no idea what they’ve changed.”

Pinto said the bank will closely review changes to how the project weighs market risks.

CHRISTOPHER WOLFE, HEAD OF NORTH AMERICAN BANKING, FITCH RATINGS:

“This was largely expected given the strong pushback against the original proposal. The big question will be whether the election changes anything from the new draft proposal.”