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Industry and regulators debate Basel III 'endgame' and capital costs for lending
Summary
SIFMA, bank trade groups and others told the committee that the Basel III endgame and overlapping U.S. capital and stress‑test regimes risk raising banks' effective capital costs and could reduce lending, while other witnesses said strong capital standards helped limit systemic risk.
A major focus at the hearing was the interaction of international and U.S. capital rules and how regulators should calibrate capital requirements to preserve lending while maintaining safety and soundness.
Ken Benson of SIFMA warned that the Basel III endgame proposal would push aggregate U.S. bank capital beyond historically high levels and that some trading‑book and securitization treatments risked ‘‘double counting’’ when layered on top of U.S. stress‑test and liquidity regimes. Benson said that…
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