Senate Republicans Urge Fed to Revise Basel III Endgame Rule

Senate Republicans warned the Federal Reserve ("Fed") that elements of its Basel III Endgame proposal would impose unnecessary costs, restrict credit access, and weaken U.S. competitiveness.

In a letter to Fed Chair Jerome Powell and Vice Chair for Supervision Michelle Bowman, Senate Banking Committee Chair Tim Scott et al., the Senators asserted that the original proposal—requiring both the Expanded Risk-Based and Standardized Approaches—would create redundancy, inflate risk-weighted assets, and raise G-SIB surcharges. They argued that adding a separate operational risk charge would double-count losses already captured under the Stress Capital Buffer. 

The Senators urged the Fed to evaluate capital requirements holistically, using pre-pandemic levels as a baseline rather than the current elevated ratios that reflect temporary balance sheet growth. They emphasized that capital policy should balance safety and efficiency to preserve market function and economic dynamism. They referred to the Fed’s April 2025 Financial Stability Report, which found U.S. banks "sound and resilient" and that further capital increases would add little to stability.