SIFMA supports appropriate regulation of the capital markets and their participants by both market regulators, who have decades of experience in promulgating rules and supervising the marketplace, as well as prudential regulators. U.S. prudential rules generally impose significantly higher capital and liquidity costs on banking entities with significant capital markets operations. This has increased costs to financial firms and the economy as a whole and reduced market depth for a wide variety of corporations and other end-users, particularly during periods of economic stress.

This has also had another effect: transforming U.S. banking regulators into the most impactful supervisors of the capital markets superseding the oversight role traditionally played by the SEC and CFTC. This has created distortions in the capital and liquidity requirements between market and prudential regulators as well as lessened the efficiencies by increasing costs to end users. It is thus crucial to align and allow for mutual recognition of, to the extent possible, the capital and liquidity standards set out by the U.S. banking regulators and the market regulators.

Prudential Regulation Blog Series

• Understanding the Current Regulatory Capital Requirements Applicable to US Banks

  Part I

• How the Basel III “Endgame” Reforms Will Transform US Capital Requirements

  Part II

• Identifying an Optimal Level of Capital and Evaluating the Impact of Higher Bank Capital Requirements on US Capital Markets

  Part III

• Explaining the Overlap Between the FRTB and the Global Market Shock

  Part IV

• The Basel III Endgame’s Potential Impacts on Commercial End-Users

  Part V

• Understanding the Proposed Changes to the US Capital Framework

  Part VI

• The Federal Reserve Should Revise the US GSIB Surcharge Methodology to Reflect Real Risks and Support the Economy

  Part VII

• A Rejoinder on the Need for Trading Book Capital Increases

  Part VIII

• The Federal Reserve Should Remove “Gold-Plating” in the Basel 3 Endgame

  Part IX

• How the Basel III Endgame Could Impair Securitization Markets and Harm US Businesses and Consumers

  Part X

• Revisiting US Treasury Market Capacity and Resiliency: Part I

  Part XI

• Revisiting US Treasury Market Capacity and Resiliency: Part II

  Part XII

• Why the Federal Reserve Should Pay Particular Attention to Banks’ Capital Markets Activities When Deliberating Revisions to the Basel 3 Endgame Proposal

  Part XIII