U.S. Financial Services Committee holds bank capital hearing as Andy Barr calls for tailored risk-aligned requirements and a Basel III Endgame re-proposal

The U.S. Financial Services Committee’s Financial Institutions Subcommittee held a hearing on the U.S. bank capital framework, with Subcommittee Chair Andy Barr setting out Republican priorities for a more transparent, risk-aligned, and tailored capital regime. Barr argued that capital requirements should protect safety and soundness while avoiding unnecessary constraints on credit and competitiveness. In his prepared opening remarks, Barr criticised what he described as “gold-plating” of international standards and one-size-fits-all requirements across banks with different risk and business profiles. He said the Biden Administration’s initial Basel III Endgame proposal drew bipartisan criticism and should be reproposed, warning it could have pushed certain business lines, including residential mortgages and market-making, toward offshore institutions. Barr also called for capital requirements to be tailored by size, complexity, and risk profile, building on S. 2155, and proposed indexing regulatory and category thresholds to economic growth to avoid discouraging bank expansion, alongside an objective of avoiding a “barbell” system dominated by only small banks and global systemically important banks. The hearing is positioned to gather witness input on designing a capital framework that balances stability, competitiveness, and proportionality across community, regional, and larger institutions.