Events: Alexa Philo, AFR’s Senior Policy Analyst, Testifies Before the House Financial Services’ Subcommittee on Financial Institutions and Monetary Policy

AFR’s Sr. Policy Analyst for Banking, System Risk, Economic Justice & Racial Equity, Alexa Philo, testified before the House Financial Services’ Financial Institutions and Monetary Policy Subcommittee, at the hearing, “Implementing Basel III: What’s the Fed’s Endgame?”

Philo reviewed how increased capital requirements in the Fed, FDIC, and OCC’s Large Bank proposal strengthen the banks’ ability to withstand stresses that would otherwise imperil their financial viability and hurt depositors, customers and the economy. With internal models falling far short in the 2008 crisis, the proposal requires banks to transition to new standardized models in the Basel III Endgame.

The proposal also updates the agencies’ Regulatory Tailoring framework to restore heightened capital standards for banks in the $100 billion to $250 billion total assets range. To address the lack of transparency on SVB’s unrealized securities losses in 2023 and their impact on capital, the proposal removes an opt-out provision that, when no longer allowed, will require unrealized losses to be run through accumulated other comprehensive income and regulatory capital for banks in the $100-$250 billion total assets band.

Robust capital levels prevent financial crises that have vastly disproportionate impacts on Black, LatinX and other underserved communities. AFR strongly urged the agencies to move forward on these proposals as more well-capitalized banks are better able to provide credit to customers and communities, advancing economic justice and helping the economy to work better for everyone.

Watch the testimony here
Read the written testimony here