Major Bank CEOs Criticize Proposed Basel III Rules in Senate Testimony

CEOs argue increased capital requirements could harm economy, while Senate Banking Committee Chair supports new rules

Eight major bank CEOs testified before the Senate Banking Committee, criticizing the proposed Basel III endgame capital rules, arguing that the rules would harm the economy and are unnecessary given the current capitalization of large U.S. banks.
The CEOs argued that the proposed rules would unjustifiably increase capital requirements by 20-25% for the largest banks, limiting their ability to deploy capital when most needed and causing a harmful ripple effect on the economy, markets, businesses of all sizes and American households.
Despite opposition from the CEOs, Senate Banking Committee Chair, Sen. Sherrod Brown, supported the proposed new rules, stating that the economic devastation of 2008 and the uncertainty from the failure of Silicon Valley Bank hurt working families.
Moderate Democrats may hold the fate of the Basel III proposal in their hands. While lawmakers don't officially have the power to block or rewrite the rule, their political pressure on Fed Chairman Jerome Powell to drop or significantly rewrite the proposal may gain purchase.
The CEOs also expressed concern about the migration of financial activities into the non-banking sector, particularly in a period of tremendous technological innovation, and the potential undermining of the strengths and foundations of the unique American financial system.