SIFMA Statement on the Capital Surcharge for Systemically Important Banks

Release Date: July 20, 2015

Contact: Liz Pierce, 212.313.1173, [email protected]  

SIFMA Statement on the Capital Surcharge for Systemically Important Banks

Washington, DC, July 20, 2015— SIFMA today released the following statement from Kenneth E. Bentsen, Jr., president and CEO, after the Federal Reserve issued its capital surcharge rule for systemically important banks:

“Upon first review, we are disappointed that the final rule does not sufficiently address a number of concerns expressed in our comment letterand therefore is likely to unnecessarily constrict the ability of financial institutions to lend, facilitate capital formation and drive economic growth.

“We appreciate that the Fed has made some changes aimed at improving the rule’s calculation methodology, especially regarding foreign exchange and certain types of low-risk short-term funding. Yet, questions remain regarding the fundamental analysis that underpins this rule. Given the significant impact this rule could have on the U.S. economy, we continue to believe that the Fed’s underlying methodology should be fully disclosed and subject to public discussion as part of the rulemaking process. This is especially important for a rule that will subject U.S. institutions to requirements that go beyond international standards.

“We remain concerned that the final rule does not appropriately recognize the tremendous amount of change that has already occurred at financial institutions to meaningfully reduce systemic risk. The industry has fundamentally reshaped itself into one that is safer, sounder, and more resilient, with increased capital and liquidity buffers, new resolution regimes and new clearing and margin mandates, among other changes. Moving forward, it is important for regulators to consider the cumulative impact of all the new rules on the industry and in turn its clients and the economy.”