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Basel III Endgame May Not Be capital Neutral for Largest US Banks, Fed Official Warns
The Federal Reserve is assessing whether the finalization of Basel III capital rules will be capital neutral for the largest US banks, a Fed official indicated. While adjustments to capital buffers for global systemically vital banks (G-Sibs) are intended to help achieve overall neutrality, the impact on individual institutions remains under review.
Norah Barger, acting deputy director of the Federal Reserve, stated the agency is taking a “comprehensive” look at the interplay between risk-based capital requirements, G-Sib surcharges, and the leverage ratio to determine the overall effect of the Basel III endgame package.
