Following recent regulatory relief for small-scale banks, lobbyists, including The Financial Services Forum and the Clearing House, are actively working to persuade watchdogs that mega-banks should also receive benefits from regulatory rollbacks. Specifically, lobbyists argue that the G-SIB surcharge is superfluous, as it does not consider the implications of new reform.

Additionally, the Federal Reserve Board has suggested the implementation of a “stress capital buffer” as part of their annual stress testing framework. Utilizing research from a recent Debevoise In Depth, Breakingviews concluded that, calculating in the G-SIB surcharge, these buffers would increase capital requirements for G-SIBS “an additional $10 billion to $50 billion.”

Lonely Hearts
By Gina Chon
June 28, 2018