Wall Street’s Deregulatory Campaign: Who Pays When Banks Lose?

Banking & Insurance Wall Street’s Deregulatory Campaign: Who Pays When Banks Lose?By Mayra Rodriguez Valladares,

--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.Summary Major banking groups are pressing federal regulators to significantly reduce capital requirements under proposed Basel III reforms. Their joint letter seeks to slash operational risk capital, claiming market risk rules double-count exposures, and requests looser credit definitions with delayed implementation. However, critics contend these demands rely on flawed justifications, misrepresenting past operational losses and overlooking historical market failures. Reducing capital would heighten risks for depositors and taxpayers in future financial crises, as robust capital buffers are essential safeguards. Regulators have already granted concessions, and further relief would erode critical post-2008 protections, increasing systemic vulnerability. The industry has not adequately justified these substantial changes.

Wall Street Industry Groups are seeking to lower safeguards critical for the safety of the banking system and the American economy.gettyWrapped in the technical language of Basel III capital reform, the Bank Policy Institute, American Bankers Association, Financial Services Forum, U.S. Chamber of Commerce, and Consumer Bankers Association have jointly asked federal regulators to cut the capital requirements that backstop the American banking system. Their request is large, the justifications are suspect, and the people who would bear the consequences—depositors and taxpayers—are nowhere in the room.