Top bank regulators promised to propose a new rule that would enable them to adopt the final pieces of the Basel III international regulatory framework "as soon as possible."
In a joint statement issued Friday morning, the Federal Reserve, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency said implementing the Basel III endgame, also
Once the proposal is completed, it will be put through a standard federal rulemaking process, which includes public commentary.
In the statement, the agencies lauded the importance of maintaining robust capital standards.
"Strong capital requirements have proven to be a critical element of the bank regulatory framework, allowing the banking industry during times of economic stress to serve as a source of strength for the U.S. economy and to lend to creditworthy households and businesses," they wrote.
Issued by the Basel Committee on Banking Supervision in 2017, the Basel III endgame consists of the final piece of the international standards rolled out following the financial crisis of 2008. It sets guidelines for addressing market risk, operational risk, credit risk and leverage ratios. The rules only apply to large banks.
The deadline for regulators to adopt the Basel III endgame is January 2023 and the US still has significant work to do to be compliant with the standards. Doing so requires the regulators to shepherd any necessary policy changes through the rulemaking process established by the Administrative Procedure Act, which can take several months or more than a year to complete.
The Fed, FDIC and OCC did not provide a time frame for introducing a rule change to meet the Basel standards or commit to completing the process by the beginning of next year.
The reaffirmation by the three agencies came two days after Fed Vice Chair for Supervision Michael Barr, the central bank's chief regulator, said preparing the banking system to meet Basel III standards was among his top priorities and would be part of a
"Taking a holistic view will help us consider adjustments, if any, to the supplementary leverage ratio, countercyclical capital buffer and stress testing," Barr said during a
Previously, Fed officials have said implementing the Basel III endgame
Barr said he was not committed to an overall capital neutral approach as the Fed re-thinks its various capital requirements.
"I've been very careful in my remarks not to comment on whether a rule in the future would need to be capital neutral," he said during a Q&A session following his remarks Wednesday. "I don't think there's anything implicit in our review that would suggest that. We really want to take that holistic view."