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Senators press Powell on reputational risk, supplemental leverage ratio and capital rules; Wells Fargo cap removal noted
Summary
The Senate committee questioned Federal Reserve Chair Jerome H. Powell about supervisory changes at the Fed, planned revisions to the capital framework including the supplemental leverage ratio, and agency actions such as removing Wells Fargo’s asset cap.
Senators on the Banking, Housing, and Urban Affairs Committee used Chair Jerome H. Powell’s appearance to probe the Federal Reserve’s supervisory posture, capital‑framework reviews and what Powell described as a move away from reliance on subjective ‘‘reputational risk’’ in examinations.
Powell said the board has identified reputational risk in prior supervisory materials and has moved to clarify how examiners should treat it. He told the committee that Vice Chair for Supervision Michelle Bowman, a former supervisor, ‘‘speaks that language’’ and will be central to implementing changes at the examiner level.
On capital rules, Powell said the Fed is preparing actions on two main…
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