Fed Chair Powell Open to Major Changes in Basel III Proposal Amid Broad Opposition

Jerome Powell, during a House Financial Services Committee hearing, signaled openness to significant amendments to the Basel III proposal, reflecting widespread criticism from lawmakers, banks, and industry groups.

Jerome Powell, chairman of the Federal Reserve, announced potential 'broad and material' changes to the Basel III endgame capital rule, citing a 'live option' for re-proposal.
Republican lawmakers and large banks have called for the withdrawal of the current Basel III proposal, advocating for a restart of the regulatory process with more rigorous analysis.
Nearly 400 public comments on the proposal, 97% of which were in opposition, are under review by the Fed, highlighting unprecedented criticism.
Areas such as mortgage origination and derivatives clearing are flagged for potential amendments, with Powell acknowledging the need for adjustments to avoid economic harm.
Powell remains optimistic about achieving broad support for a final rule, despite internal divisiveness and calls for transparency in the rulemaking process.