U.S. Fed Signals Limits On Bank Pushback Over Capital Rules

The Federal Reserve has told large lenders not to mount a strong challenge to new capital rules, according to people familiar with the matter. Vice chair for supervision, Michelle Bowman, conveyed the message in discussions with bank executives in recent weeks.

The central bank last month released revised drafts of Basel III and GSIB surcharge rules, estimating a reduction of about 4.8% in capital levels at major banks. The changes follow earlier proposals in 2023 that had outlined higher increases. Some banks have indicated plans to seek changes during the 90-day comment period. JPMorgan Chase said its capital level could rise under the proposal, while its Chief Executive Officer (CEO), Jamie Dimon, raised concerns in recent remarks. Officials aim to complete the rulemaking process this year after prior industry opposition.