New Basel Endgame Draft Still Faces Issues, According to US FDIC Vice Chair Hill

Title: Concerns Persist Around Basel Endgame Capital Hikes

Date: Monday

In Washington, Federal Deposit Insurance Corporation (FDIC) Vice Chair Travis Hill expressed ongoing concerns regarding the new draft of the "Basel Endgame" bank capital increases. He highlighted issues particularly related to the assessment of banks’ market risks during a recent event.

The FDIC, along with the Federal Reserve and the Office of the Comptroller of the Currency, has been collaborating on revising the rules after facing significant pushback from the banking industry. However, disagreements among key officials have slowed down the progress toward formally re-issuing the updated draft for public review.

Hill, who is one of five votes on the FDIC board, voiced worries regarding both the process and the content of the Basel re-proposal, confirming such reports from knowledgeable sources.

While acknowledging that the new draft contains notable enhancements—such as aligning banks’ capital requirements more closely with their risk profiles—Hill pointed out that it still requires further refinement. He specifically noted that the draft tends to overstate the capital needed for market fluctuations, which could render banks’ trading operations "uneconomical."

He also mentioned that he was uncertain when the regulatory body would hold a vote on the re-proposal of the rule.