US Fed's top bank cop defends effort to hike bank capital
© Reuters. FILE PHOTO: Federal Reserve Board Vice Chair for Supervision Michael Barr testifies at a House Financial Services Committee hearing on the response to the on recent bank failures of Silicon Valley Bank and Signature Bank, on Capitol Hill in Washington, U.
The proposal implements international capital standards agreed by the Basel Committee on Banking Supervision in the aftermath of the 2007-2009 financial crisis. Since its release in July, banks have been pushing back hard against the plan, enlisting allies in Congress and launching ad campaigns. They say it will hurt mortgage borrowers, lending to green projects and the broader economy.
Barr also pushed back against the industry's refrain that higher capital costs for banks will mean curtailed lending and potential economic harm. He noted that banks sounded similar warnings when regulators imposed tougher rules in the wake of the financial crisis, but the U.S. banking system has remained vibrant and the economy has grown.
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