HFSC HEARING
OVERVIEW
On July 10, the House Financial Services Committee held a hearing entitled “The Federal Reserve’s Semi-Annual Monetary Policy Report.” The witness in the hearing was:
- The Honorable Jerome H. Powell, Chairman, Board of Governors of the Federal Reserve System
Below are some key takeaways from the hearing prepared by Delta Strategy Group.
KEY TAKEAWAYS
Chairman Patrick McHenry (R-NC)
- Under Vice Chair Bar, the Fed’s supervisory and regulatory agenda has become politicized. Most notably, the development of the Basel III Endgame proposal has been a mess. This process has been cloaked in opaque standards and timeline set its meetings of unaccountable global governance bodies. Broad and material changes made to Basel III Endgame necessitate a full reproposal. Failure to do so will result in an immediate Congressional Review Act vote out of this House of Representatives as quickly as we can process it. I urge you to reject outside political pressure in this volatile time and stay the course for the good of the American people and economy.
Ranking Member Maxine Waters (D-CA)
- President Biden is and will continue to advance policies that are providing good paying jobs in an economy that works for everyone. Project 2025 would dismantle U.S. democracy and the economy as we know today. Project 2025 promotes radical ideas to materially undermine the Federal Reserve if it is not dismissed.
The Honorable Jerome H. Powell, Chairman, Board of Governors of the Federal Reserve System
- We are close to agreement on the Basel III proposal. We are still negotiating some of the points with the OCC and FDIC, but we will eventually bring a revised proposal to the public for additional public comment, but we will not fully repropose the entire rule and start over. Changes to the GSIB surcharge will be included, but many stress tests will not be. Finalization of Basel III will not be until next year.
- We must get a stablecoin framework in place for safe markets.
Congressman Ritchie Torres (D-NY)
- If banks are already sufficiently capitalized, which the Fed has reiterated, there is no purpose to additional capital requirements as proposed in Basel III.
Congressman Zach Nunn (R-IA):
- Basel III will deeply impact the ability of agriculture commercial end users to hedge their risks in derivatives markets. The Fed must work to ensure those concerns are not in any new proposals.
Congressman Wiley Nickel (D-NC):
- Congress must finalize stablecoin legislation this year, and the Fed should support these efforts.