• Fed hosts conference to reframe US capital reform
• Calls grow to complete Basel III implementation
• Trump-era voices push for smarter, not stricter, rules
• Past proposals to raise capital were shelved
• Industry demands more clarity, less complexity
• Regulators promise broader consultation and transparency
• Goldman Sachs and Wells Fargo call for balanced reform
• Bank of England warns against the US opting out of Basel
• Fed says capital rules must enable global competition
• Revised framework expected to emerge from new feedback

Calls to finalize the long-delayed Basel III reforms dominated a Federal Reserve conference on Tuesday, where regulators, bankers, and analysts urged a comprehensive and coordinated overhaul of the U.S. capital framework.

Fed Chair Jerome Powell opened the event by stressing the need for a unified approach.

“We need to ensure that all the different pieces of the capital framework work together effectively,” he said, highlighting the need to assess risk-based capital, leverage ratios, stress tests and surcharges as part of a connected whole.

The conference was spearheaded by Michelle Bowman, the Fed’s Trump-appointed vice chair for supervision, who has advocated for quicker reforms to capital and supervisory structures.

The event marks a clear shift in tone, with regulators aiming to incorporate broader industry and expert input than during the Biden-era rulemaking process.

Randal Quarles, a former vice chair at the Fed and now chair of The Cynosure Group, said previous proposals to increase aggregate capital levels were misguided. But completing Basel III implementation remains essential, he added.

“It’s very important … that we do finish the implementation of Basel,” Quarles said, urging a smart, balanced and technically sound approach.

The July 2023 proposal to raise capital requirements by 19 percent for the largest U.S. banks sparked industry backlash and was later shelved after Donald Trump’s election victory.

Legal experts now expect a more measured revision. “This is the beginning of them trying to wrap things up,” said Dan Hartman of law firm Nutter.

The regulatory retreat of the last year included changes to stress testing, the enhanced supplementary leverage ratio, and supervisory ratings.

But Tuesday’s event suggested a renewed push to unify and simplify rules that have been widely criticised as overly complex and economically restrictive.

Goldman Sachs executive Sheara Fredman stressed that reforms must strike a balance between safety and economic growth and warned against crafting capital rules in isolation.

Mike Mayo, senior analyst at Wells Fargo Securities, was more blunt. He called the current framework “too confusing, too constraining and too costly,” claiming it muddles decision-making for boards, investors and even regulators.

There was also pushback against suggestions the U.S. should abandon the Basel framework entirely.

Phil Evans, head of prudential policy at the Bank of England, warned such a move would create global inconsistency, drive up capital costs for U.S. banks, and hurt international competitiveness. Fredman and Quarles echoed his concerns.

“This is not the time for fragmentation,” Mayo said. “Get it done, get it done, get it done.”

As the session concluded, Powell reiterated the Fed’s openness to feedback and evolution.

“We are a dynamic institution,” he said, “and we want to improve the capital framework to ensure large banks are well capitalized, manage risk effectively, and can compete globally to fuel growth.”