Fed Chair Powell on Integrated Review of Capital Framework for Large Banks

Conference on Bank Capital Framework

• 💡 Fed Chair Jerome Powell expressed pleasure at the strong interest in the conference focused on the integrated review of the capital framework for large banks.
• 🎯 He thanked Vice Chair for Supervision Bowman for initiating the event at the start of her term and acknowledged the Fed staff's efforts.

Pillars of the Capital Framework

• 🏦 The US bank capital framework encompasses risk-based capital requirements, leverage requirements, the surcharge for the largest banks, and stress tests.
• 🧩 Powell emphasized the importance of considering all elements of the capital framework in concert rather than in isolation to ensure a safe, sound, and efficient banking system.
• 📝 The Fed has outstanding or in-progress proposals across all four areas of the capital framework.

Supervisory Practices and Competition

• 🔍 Powell highlighted the need for supervisory practices to focus on critical areas determining safety and soundness.
• 📈 He stressed that large banks must be well capitalized and effectively manage their key risks.
• 🚀 The goal is for large banks to compete freely with non-bank financial institutions and banks in other jurisdictions to support economic growth.

Openness to Feedback

• 💬 The Federal Reserve is presented as a dynamic institution that is open to new ideas and feedback on improving the capital framework for large banks.
• 🤝 Powell looked forward to the insights from the conference participants.