Opening Remarks by Chair Powell, July 22, 2025

Summary

The Federal Reserve Board hosted a conference discussing the integrated review of the capital framework for large banks. The event, initiated by Vice Chair for Supervision Bowman, included input from industry experts, academics, and policymakers. The discussion focused on the U.S. bank capital framework, which covers risk-based capital requirements, leverage requirements, stress tests, and the surcharge for large banks. The goal was to explore how these components can work together to ensure a safe, sound, and efficient banking system that supports economic growth. The Fed is open to new ideas and feedback on improving these frameworks.

Takeaways

• 😀 The Federal Reserve Board is hosting a conference on the integrated review of the capital framework for large banks.
• 😀 Vice Chair for Supervision Bowman proposed this event at the beginning of her term to foster discussion on capital frameworks.
• 😀 The conference features perspectives from industry veterans, academics, and current/former policymakers who are experts in large bank operations.
• 😀 A key advantage of the conference is examining the capital framework in its entirety rather than in isolated parts.
• 😀 The main components of the U.S. bank capital framework include risk-based capital requirements, leverage requirements, the surcharge for the largest banks, and stress tests.
• 😀 Discussions at the conference will focus on the status and future direction of these four key areas of the capital framework.
• 😀 There are proposals currently under review or in progress for each of these four areas within the framework.
• 😀 The regulatory capital framework and banking rules are executed through supervision, an area where Vice Chair Bowman has considerable expertise.
• 😀 The goal is to ensure that large banks are well-capitalized, manage key risks effectively, and remain competitive in the global market.
• 😀 The Fed remains open to new ideas and feedback on improving the capital framework to maintain a safe, sound, and efficient banking system.
• 😀 The Fed’s commitment is to create a banking environment that supports economic growth while balancing safety and soundness.

Q & A

What is the primary focus of today's conference?

The primary focus of today's conference is the integrated review of the capital framework for large banks, discussing its various elements and ensuring their effective operation together.

Who is credited with the idea of holding this event?

Vice Chair for Supervision Bowman is credited with having the great idea of holding this event at the outset of her term.

What kind of professionals are participating in today's conference?

The conference includes perspectives from industry veterans, academics, and current and former policymakers, all of whom are well-versed in the operations of large banks and the capital framework.

Why is it beneficial to consider all elements of the capital framework together?

It is beneficial to consider all elements of the capital framework together because it ensures that the different pieces work together effectively, helping to maintain a safe, sound, and efficient banking system.

What are the key components of the US bank capital framework?

The key components of the US bank capital framework include risk-based capital requirements, leverage requirements, a surcharge for the largest and most complex banks, and stress tests.

What has been noted about the status of proposals related to the capital framework?

There are proposals either outstanding or in the works across all four areas of the capital framework, signaling ongoing efforts to refine and improve the system.

Who is responsible for implementing banking rules and regulations?

Banking rules and regulations are implemented through supervision, an area where Vice Chair for Supervision Bowman brings deep experience as a former banker and state supervisor.

What is emphasized as a priority in banking supervision?

A priority in banking supervision is ensuring that large banks are well capitalized, manage key risks effectively, and remain competitive with non-bank financial institutions and banks in other jurisdictions.

What does the Federal Reserve hope to achieve by hearing new ideas and feedback?

The Federal Reserve is open to hearing new ideas and feedback to improve the capital framework for large banks, aiming for a dynamic and adaptive regulatory system.

How does the Federal Reserve view the role of large banks in the economy?

The Federal Reserve views large banks as essential for supporting economic growth, providing capital, and ensuring a well-functioning banking system through competition with other financial institutions.