NEW YORK, Sept 10 (Askume) – The Federal Reserve’s supervisory chief on Tuesday outlined sweeping reforms, easing two key draft bank capital rules. The projects have been delayed by strong industry opposition and disagreements among the federal banking regulator’s top regulators.
Shares of major U.S. banks fell after Federal Reserve Vice Chairman of Supervision Michael Barr unveiled what is known as the Basel final bank capital increase plan.
Here are the industry comments:
Bank of America (BAC.N) CEO Brian Moynihan (during the Barclays Global Financial Services Forum)
“We’re fine. We can continue to buy back stock. On the other hand, every Fed chairman has said the industry is properly capitalized and suddenly we need more capital. If we increase our capital by 10%, that would prevent us from providing $160 billion in loans at competitive rates to small businesses and middle-market companies.”
Moody’s banking industry head Chris Stanley:
“We are close to elections, which will slow progress, but the Basel endgame and GSIB surcharge rules will remain in place no matter who wins.”
Argus Research Bank analyst Stephen Biggar:
“This is less than half a percentage point of the proposed rate hike, but it is disappointing to see a negative reaction from bank share prices. The market will have been expecting a bigger rate cut than originally proposed.”
Financial Services Forum President Kevin Frommer (statement):
“Capital rules should avoid unnecessarily harmful effects on the entire U.S. economy. The revisions should comprehensively address the concerns raised by many commenters and identify the potential costs to households and businesses of all sizes.”
“We look forward to reviewing the amendments and participating fully in the public comment process. Getting this right is vital to the American economy.”
JPMorgan Chase (JPM.N) President Daniel Pinto (during the Barclays Global Financial Services Forum)
“Obviously 10 is better than 20. That’s a good thing. The main thing is we don’t know what changes they made.”
Pinto said the bank will carefully study how the draft takes into account market risks.
Christopher Wolfe, head of North American banks at Fitch Ratings:
“This was largely expected given the strong opposition the original proposal faced. The big question is whether there will be any changes to the new draft proposal as a result of the election.”
