By Pete Schroeder
WASHINGTON (Reuters) – Federal Reserve Chairman Jerome Powell said he expects bank regulators will adopt “broad, material” changes to a contentious plan to raise large bank capital requirements.
Testifying before Congress, Powell said officials have begun reconsidering the so-called “Basel III endgame” proposal unveiled in July, and are aware of industry complaints about its cost and potential economic impact.
“We do hear the concerns and I do expect there will be broad material changes to the proposal,” he told the House Financial Services Committee. “I’ll add that I’m confident that the final product will be one that has broad support at the Fed and in the broader world.”
Powell also did not rule out reproposing the rule to solicit further feedback, a step that could significantly delay the project and potentially push it into a new presidential administration.
Reuters reported before Powell’s testimony that regulators were looking into major changes to the proposal, which would change how banks gauge their risk and how much cash to hold against potential losses. Banks have intensely opposed the proposal, calling it misguided and overly costly.
(Reporting by Pete Schroeder)
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