news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Data is a treasure

Data treasure

Less worries about stock trading

Powell's major actions came to light.

On August 16, Eastern Time, Bloomberg quoted people familiar with the matter as saying that Federal Reserve Chairman Jerome Powell recently attended a closed-door meeting with CEOs of major U.S. banks and encouraged them to cooperate with the Federal Reserve to avoid a years-long legal battle over the Biden administration’s signature capital plan.

Looking back, the new banking regulatory plan released by US regulators in July last year required banks with assets of more than $100 billion to increase their capital by about 16%. However, it was reported recently that the Federal Reserve showed other regulators a revised plan, and the increase in bank capital may be reduced from the initial 16% to a minimum of 5%.

Analysts said that the revision plan mentioned by Powell at the closed-door meeting is an important step, which means that the final version may not be finalized this year. The final plan and its impact of the "US version of the Basel Accord" will depend on the results of the US election. There are still many variables in the US regulatory authorities' bank capital reform.

Hot News

On August 16, Eastern Time, Bloomberg quoted people familiar with the matter as saying that Federal Reserve Chairman Jerome Powell recently attended a closed-door meeting with CEOs of major U.S. banks and encouraged them to cooperate with the Federal Reserve to avoid a years-long legal battle over the Biden administration’s signature capital plan.

Powell told the heads of major banks, including JPMorgan Chase & Co. CEO Jamie Dimon and Citigroup Inc. CEO Jennifer Fanning, that the public will have a chance to comment on key revisions to the plan, according to people familiar with the matter. The meeting was hosted by the Financial Services Forum, an industry group for major U.S. banks, and included the CEOs of the four largest U.S. banks - JPMorgan Chase & Co., Morgan Stanley, Citigroup Inc. and Bank of America Corp.

According to the latest revelations, the CEOs of major U.S. banks asked Powell whether the Federal Reserve would act independently of other regulators when announcing key revisions and soliciting public comments.

Some participants revealed that Powell left them with the impression that the Fed might act independently of other regulators in announcing changes to the new rules. Powell mentioned the EU's regulations for implementing the Basel Accord, pointing out that the EU version would increase banks' capital by 10% overall.

Powell’s comments to banks on the proposed capital rules were described as high-level and focused on how he plans to reach final rules, in part by seeking new public comments and publishing studies of the proposals’ impact, the people said.

Powell warned large U.S. banks that they should submit their questions to the Fed now to avoid lawsuits later.

compromise

Looking back, in July last year, US regulators announced a series of proposals for comprehensive changes to bank capital requirements in response to changing international standards and the recent regional banking crisis. The proposal requires that banks with assets of more than $100 billion must increase their capital by about 16%, and the eight largest banks in the United States need to increase their capital by about 19%.

The proposal, which is tied to the Basel III reforms that began more than a decade ago and has been called the "Basel III endgame," is said by supporters to be a solution to some of the problems exposed by the collapse of Silicon Valley Bank and Signature Bank.

However, it was reported recently that the Federal Reserve has submitted a revised plan to other US regulators. The new plan significantly reduces the capital requirements for large trading banks, and the increase in bank capital may be reduced from the initial 16% to a minimum of 5%. This move will greatly reduce the burden on Wall Street banks.

The new bill would roll back key parts of the landmark legislation, including ones that could have a significant impact on large banks with large trading operations, the people said.

Some analysts believe that this policy easing will mean a victory for Wall Street banks, which launched the most intense lobbying after the proposal was announced in July last year. A large number of revisions to the plan are more likely to achieve Powell's goal of gaining broad support from the board of governors.

Prior to this, U.S. banking groups had launched an intense lobbying campaign, arguing that the regulators' initial plan would reduce the competitiveness of the U.S. banking industry and reduce the affordability of household and business loans.

The big U.S. banks believe that they have sufficient capital, not only withstood the test of the COVID-19 pandemic, but also regularly passed the Federal Reserve's annual stress test, so any capital increase is unreasonable. Some big banks even threatened to file a lawsuit.

variable

Some commentators said that Powell recently held a closed-door meeting with CEOs of major US banks, trying to use his personal influence to reach a consensus between Wall Street and Federal Reserve board members and push for the final completion of the plan.

At a congressional hearing in July this year, Powell told U.S. lawmakers that the United States had "made considerable progress" in making regulatory changes in accordance with the Basel Accord and that regulators were "very close" to making a decision on the final revision of the new regulations.

Powell believes that regulators should seek more opinions on the "US version of the Basel Accord". The Fed seeks a period of comment after issuing the revised version of the relevant plan, which is about 60 days.

He stressed that there is still some gap before coming up with a revised proposal. He refused to disclose the exact adjustments to the "US version of the Basel Accord new rules" plan, saying that it "may be correct" to complete the final version of the new rules in early 2025.

Analysts said that the revision plan mentioned by Powell is an important step, which actually means that the final version may not be finalized this year. The final plan of the "US Basel Accord New Rules" and its impact will depend on the results of the US election. This means that there are still major variables in the US regulatory authorities' bank capital reform.

Source: China Securities

Statement: All information content of Databao does not constitute investment advice. The stock market is risky and investment should be cautious.

Editor: He Yu

Proofreading: Gao Yuan

Data treasure