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Powell: Fed will repropose Basel III endgame after coordinating with other regulators
Summary
At a House hearing, Chair Powell said the Federal Reserve intends to repropose the Basel III 'endgame' capital rule promptly once it coordinates with the other U.S. banking agencies, after concerns that a previous draft would 'gold‑plate' requirements and hurt U.S. competitiveness.
Members pressed Powell about bank regulation, the outgoing vice chair for supervision, and the status of the Basel III endgame proposal.
Powell said the Fed intends to repropose the Basel III endgame and to coordinate closely with the other two banking regulators. “We do intend to repropose Basel 3 endgame, and we intend to do that just as soon as we can get together with the new leadership at the two other banking agencies,” Powell said. He added that his starting point is that capital in the banking system for the largest banks “is about right.”
Context and member concerns
- Leadership and timing: Several members noted that Michael Barr, the outgoing vice chair for supervision, had driven a July 2023 proposal that some critics — including multiple committee members — called overly stringent and likely to reduce U.S. banks’ global competitiveness. The transcript records Barr’s departure timing and members’ concerns that rulemaking should pause until a successor is confirmed.
- Economic impact and process: Members asked Powell whether the Fed would conduct thorough economic impact analyses and reopen proposals for public comment consistent with the Administrative Procedure Act. Powell said the agencies would coordinate and that public comment would be part of the process.
Why it matters: Capital rules affect banks’ cost of capital, market‑making capacity, and ultimately credit availability. Members repeatedly raised competitiveness and the potential effects on the Treasury market and community banks.
Ending: Powell told the committee the Fed will continue supervisory work while awaiting new leadership at the other agencies and that reproposing Basel III endgame is a priority once coordination is possible.
