Investment Manager Reveals Concerns About "Basel Endgame" Bank Capital Hikes | Market Risks Assessment Flawed, Says FDIC Vice Chair Travis Hill
In a recent Washington event, Federal Deposit Insurance Corporation Vice Chair Travis Hill highlighted issues with the new draft of the "Basel Endgame" bank capital hikes, particularly in how the rule assesses banks' market risks. Despite efforts by the FDIC, Federal Reserve, and Office of the Comptroller of the Currency to revise the rules after industry pushback, divisions among key officials have delayed the re-issuance of the draft for public feedback.
Hill, who holds a vote on the FDIC board, expressed concerns about the process and substance of the Basel re-proposal, noting that while the new draft has shown improvements by aligning banks' capital requirements with their risk levels, it still faces challenges. He pointed out that the draft may over-capitalize risks related to market fluctuations, potentially making banks' trading activities "uneconomical."
The timing of when the regulator will vote on re-proposing the rule remains uncertain. As an investment manager, it is crucial to stay informed about regulatory changes like the Basel Endgame bank capital hikes, as they can impact financial institutions' operations and risk management strategies. Stay tuned for further developments in this ongoing process to ensure your investment decisions are well-informed and aligned with regulatory changes in the financial market.