Federal Reserve Governor Bowman: Plans to Slightly Lower Capital Requirements for Large Banks

Odaily News Federal Reserve Vice Chair for Supervision Bowman said on Thursday that after revising a comprehensive bank capital rule, capital requirements for large banks will be slightly reduced. This is seen as a significant victory for Wall Street banks, which had successfully resisted earlier proposals to increase capital in the draft. Bowman outlined adjustments to the Basel Accord and the Global Systemically Important Bank (GSIB) surcharge. These rules determine how much capital banks need to set aside to absorb potential losses. She stated that through "reasonable calibration" of the existing rules, overall capital requirements for large banks would be "slightly reduced." She mentioned that these adjustments would eliminate overlapping regulatory standards and better align capital requirements with the actual risks faced by banks, while also noting that the trend of continuously increasing bank loss-absorbing capital in recent years had been misguided. (Jin10)