Fed Chair Powell hints at revamp of bank capital requirements under Basel III endgame proposal

  • Federal Reserve Chairman Jerome Powell indicates a significant change in proposed capital requirements for U.S. banks under Basel III endgame proposal
  • Jefferies analyst Ken Usdin predicts potential increase in stock buybacks for top U.S. banks if risk-weighted asset requirements are reduced by 50 basis points
  • Powell expects a new Basel III endgame proposal to be released this fall and final rule by early 2025
  • Progress made in talks with Federal Deposit Insurance Corp and the Office of the Comptroller of the Currency, but no formal agreement yet

Federal Reserve Chairman Jerome Powell has indicated a potential major overhaul of the proposed capital requirements for U.S. banks under the Basel III endgame proposal, according to Jefferies Group analysts. This could lead to increased stock buybacks for the largest U.S. banks if risk-weighted asset requirements are reduced by 50 basis points. The new proposal is expected to be released this fall and finalized by early 2025 after a comment period of 60 days. Progress has been made in talks with the Federal Deposit Insurance Corp and the Office of the Comptroller of the Currency, but no formal agreement has been reached yet.

Factuality Level: 8
Factuality Justification: The article provides accurate information about Federal Reserve Chairman Jerome Powell’s comments on a possible revamp of proposed capital requirements for U.S. banks under the Basel III endgame proposal and its potential impact on stock buybacks. It also mentions the timeline for the final rule and the involvement of regulatory bodies. The article is mostly factual, but it lacks some details about the Basel III framework itself and could provide more context on the Global Financial Crisis.
Noise Level: 3
Noise Justification: The article provides relevant information about the potential changes in capital requirements for U.S. banks under Basel III endgame proposal, but it lacks in-depth analysis or exploration of the consequences and long-term trends. It also contains some repetitive information and could benefit from staying more focused on the topic.
Public Companies: Citigroup (N/A), Wells Fargo (N/A), State Street (N/A)
Key People: Jerome Powell (Federal Reserve Chairman), Ken Usdin (Jefferies analyst), Ian Katz (JEFFERIES Capital Alpha Analyst)

Financial Relevance: Yes
Financial Markets Impacted: U.S. banks, specifically Citigroup, Wells Fargo, and State Street
Financial Rating Justification: The article discusses the potential impact of a revised Basel III endgame proposal on U.S. banks’ capital requirements and its possible effect on stock buybacks for these banks.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.

Reported publicly: www.marketwatch.com