Washington D.C. – Banking, Housing, and Urban Affairs Committee Hearings Reviews the effects of U.S. Financial Institutions
In the course of a recent Banking, Housing, and Urban Affairs Committee hearing, U.S. Senator Katie Britt (R-Ala.) engaged in discussions with heads of eight bank systems (G-SIBs) within the United States. The notable experts comprised Charles Scharf of Wells Fargo, Brian Moynihan of Bank of America, Jamie Dimon of JPMorgan Chase, Jane Fraser of Citigroup, Ronald Hanley of State Street, Robin Vince of BNY Mellon, David Solomon of Goldman Sachs, and James Gorman of Morgan Stanley.
Senator Britt’s questions was focused on the possible impact on the Basel III Endgame proposed rule regarding lending at banks in rural areas, particularly given that more than 42 percent of Alabama residents reside in rural areas.
The CEO of Wells Fargo, Charles Scharf, expressed his concerns regarding the proposed rule, stating that it would impact the “availability of credit and the pricing of credit on the market.” Scharf stressed that the bank will be making remarks on the Federal Reserve regarding the potential effects.
Brian Moynihan, Chairman and CEO of Bank of America, echoed his concerns, stating that increasing capital requirements could have more of an impact than many think. All witnesses of other banks, agreed this Basel III proposal would not only affect financial institutions that have more than $100 billion of assets, but also spread to community banks and local credit unions small businesses, and even individuals across Alabama.
Jane Fraser, CEO of Citigroup expressed concern regarding the global competitiveness in American financial institutions in the event that it is the case that Basel III Endgame proposed rule is adopted. She stated that the rule could place American companies and banks in a disadvantage on the global financial market.
In the course of the hearing during the hearing, Senator Britt stressed the complexity and market-altering character of the recent regulations from federal financial institutions. She emphasized the apparent inability of regulators to comprehend the cumulative and quantitative effects of these rules. The panel discussed the possible negative effects that these rulemakings could have on smaller banks, small-sized businesses as well as individuals who seek cash or loans.
Senator Britt was also concerned that any proposed rules, when it is implemented could make in the United States banking sector at a competitive disadvantage in the world. Jane Fraser affirmed that it will, highlighting the significance for American banking institutions on the international stage as well as their influence on the competitiveness of American firms.
