Overview
- Federal Reserve Vice Chair for Supervision Michelle Bowman outlined a coordinated rewrite that removes overlapping capital requirements and streamlines risk-based calculations into a single approach.
- Regulators plan to assign a 250% risk weight to mortgage‑servicing assets and end their deduction from regulatory capital to encourage bank participation in mortgage lending.
- The Fed intends to recalibrate the GSIB surcharge by updating coefficients for economic growth, adjusting short‑term wholesale funding assumptions, and using averaged indicators to curb year‑end balance‑sheet window‑dressing.
- Provisions include standardized operational risk calculations, net treatment of certain fee‑based activities such as credit cards, and a new credit valuation risk adjustment for banks with large derivatives exposure.
- Bowman said the package would modestly lower capital needs for many banks and produce a small net decrease at the biggest firms after GSIB changes, with a formal proposal set for public comment following regulator votes.