Financial regulators delay finalizing capital requirements and other rule
The finalization of the Basel III Endgame capital requirements and other major financial regulations has been postponed until President-Elect Donald Trump’s administration takes office next year.
Leaders at the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) confirmed the delay during an oversight hearing before the House Financial Services Committee.
FDIC chairman Martin Gruenberg said that while multiple regulatory proposals are under consideration, none are expected to be finalized before the current administration ends.
"We don't anticipate any of them will be ready for action prior to the end of the current administration," Gruenberg said.
Michael Barr, vice chair of the Federal Reserve, indicated that the agency’s work on liquidity, capital, and long-term debt rulemakings would resume next year under the new administration. Similarly, Comptroller of the Currency Michael Hsu said the OCC would follow the Administrative Procedure Act but refrained from committing to finalizing additional regulations in the remaining months of the current administration.
“The Federal Reserve, OCC, and the FDIC have worked cooperatively on the Basel III proposal. We received many helpful comment letters, including from members of this committee,” Barr said in a statement. “As vice chairman Barr outlined in a speech in September, we have carefully reviewed each comment letter and are in the process of considering a number of potential changes to the 2023 proposed rule that are responsive to commenters’ concerns relating to credit risk, operational risk, and market risk.
“I look forward to the agencies working together to bring Basel III to a conclusion that will strengthen bank capital and bolster financial system resilience and stability in light of the experiences of the 2008 global financial crisis.”
Read more: Fed to finalize Basel III plans
While Basel III and related initiatives are on pause, some proposals will continue progressing through the rulemaking process. These include a data collection proposal and another designed to combat elder fraud, which Barr confirmed will not be delayed.
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