Basel

The Fed has already eased certain capital requirements in response to the coronavirus pandemic. It should avoid making any further adjustments to the surcharge, which is meant to keep global banks from creating systemic risks.

In separate letters to Congress, the Fed asked for legislative action to ease Tier 1 capital minimums while the FDIC said it may use its own authority to address the market strain on banks.

Under the plan, large banks would have to hold additional capital if they purchase another bank's "loss-absorbing" debt that is used to contain fallout from a collapse.

The Federal Reserve’s top regulator, who assumed the chairmanship of the international board in November, said the FSB should explain the rationale behind its financial benchmarks while establishing new ones to combat emerging threats.

The revised recommendations are one of the last remaining pieces left to finish in the Basel III capital accords.

While much of the debate of the past decade has focused on the Dodd-Frank Act, changes to Basel capital standards have played a big role in adding to the regulatory burden.

One Federal Reserve governor’s push to use an untapped capital buffer to counteract potential losses is stoking concerns that such a maneuver could spook financial markets.

Having the Federal Reserve Board’s bank supervision chief at the helm the Financial Stability Board cements U.S. leadership on cross-border regulation.

The choice appears to reaffirm U.S. regulators' commitment to the international standards-setting body.

The proposed 9% ratio for institutions with less than $10 billion of assets is designed to create a simpler capital regime for small banks.