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Federal Reserve Chair Jerome H. Powell on Monday opened the “Integrated Review of the Capital Framework for Large Banks” conference in Washington, D.C., emphasizing the importance of a unified, effective approach to U.S. bank capital rules.
Addressing a gathering of industry leaders, academics, and policymakers, Powell said the goal of the conference is to ensure that all components of the capital framework—risk-based capital requirements, leverage requirements, surcharges for the largest banks, and stress tests—work together cohesively.
“A great benefit of this conference is the chance to consider all elements of the capital framework in concert, rather than look at each in isolation,” Powell said. He added that the review aims to help maintain a “safe, sound, and efficient banking system.”
The Fed currently has proposals outstanding or in progress across all four capital areas, Powell noted.
He also praised Vice Chair for Supervision Michelle Bowman, who conceived the idea for the review and brings a deep background in banking supervision. Powell said Bowman’s experience underscores the importance of aligning regulatory practices with safety and soundness objectives.
The Fed Chair stressed that large U.S. banks must be “well capitalized” and able to manage risk effectively, while also competing globally and supporting broader economic growth.
Calling the Fed a “dynamic institution,” Powell concluded by welcoming new ideas from conference participants and reiterated the Fed’s commitment to continual improvement in its regulatory approach.