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July 27, 2023

Fed/FDIC’s Long Overdue Capital Requirements Proposed Today Are Welcome, But Quicker Action Is Needed to Protect Main Street and the American Economy Even Though Republicans Are Working to Protect Wall St’s Bonuses

WASHINGTON, D.C.— Dennis M. Kelleher, Cofounder, President and CEO, issued the following statement in connection with Federal Reserve Board (Fed) and Federal Deposit Insurance Corporation (FDIC) bank capital rules:

“Large bank capital requirements are the foundation of a safe, sound, and stable financial system that all Americans depend on to support and protect the economy, jobs, and growth.  Undercapitalized banks pose grave threats to the country, which is why today’s capital proposals by the Fed and FDIC are welcome and necessary, albeit long overdue.  The Basel Endgame rules are in response to the 2008 crash, and they aren’t even projected to be fully implemented for another 5 years at the earliest.  That will be 20 years after the 2008 crash.  Meantime, large banks’ risks have increased and multiplied, but the capital to protect against failures, crashes, and bailouts has not kept pace. The American people need and deserve much quicker action by regulators, including the use of interim final rules.

“Unfortunately, even three of the four largest bank failures in the history of the country earlier this year – First Republic Bank, Silicon Valley Bank, and Signature Bank – have not motivated the regulators to move at a speed appropriate for the risks presented.  Notwithstanding this overly deliberative approach and unduly lengthy phase-in periods, Wall Street’s largest banks and their allies have already attacked the proposals sight unseen.  They have made it clear that they are going to do whatever is necessary to stop any capital increases, no matter how necessary, appropriate, and overdue.  That’s because maximizing Wall Street bonuses depends on minimizing capital.  However, they will never admit that and are engaged in a comprehensive disinformation campaign based on false claims designed to create a smokescreen behind which they will be working to protect their bonuses. It’s a sad day for the country to see almost all the Republican members of the agencies repeating the industry’s talking points while voting against these necessary proposals.  They appear to be part of the Wall Street bonus protection system and I expect history will judge them appropriately harshly.

“Nevertheless, it is past time for regulators to act as decisively and quickly in preventing the next financial crash as they do when responding to a crash in progress, as happened earlier this year, in 2020, and in 2008-2009.  Only when regulators do this will the American people get the protection they deserve and be treated as well as regulators treat Wall Street and large banks when they have their hands out for bailouts.  We look forward to reviewing these proposals in detail and responding at the appropriate time, but regulators need to be vigilant for the ongoing, ever-present risks that arise from large banks continuing to be dangerously undercapitalized.”


Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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