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The United States is finalizing another round of regulations for global banks. That means it's time for the best (and worst!) regulatory lobbying campaigns money can buy.
Federal Reserve Chair Jay Powell assured Congress this week that there would be “broad and material changes” to proposed bank capital rules — known by the cheesy name “Basel III endgame” — by the end of this year. This shouldn't be a shocking development, as Powell expressed concern about the potential downsides of the proposal when it was first released.
But Powell today denied that the Fed was considering withdrawing the rule, which is how some Fed watchers initially interpreted his comments. For example, Bank of America highlighted the word “cancelled.” This term appears to have been used by a member of the House of Representatives, not Powell himself.
Industry opposition is normal and expected any time U.S. regulators propose tougher rules.
This time there was a notable reaction from lawmakers as well. To be fair, the original proposal for Basel III Endgame was difficult; In his statement last year, Powell noted that it “goes beyond what the Basel Accord requires.” It is not only the banking industry that has declined.
But the strangest and funniest reaction came from the banking industry. We saw this online yesterday (h/t @quantian1):
. . . “97% of the public agrees” that the final Basel III agreement is “bad for working Americans”?
What does that even mean? Probably 97% of American audiences agree that Basel III Endgame is a superhero movie.
So we did what any self-respecting annoying reporter would do and emailed the organization to ask for the source.
Unsurprisingly, the Banking Policy Institute is an American trade group that represents banks. Jamie Dimon chairs the group's board of directors, which mainly consists of a list of senior executives from the largest money center banks.
When asked about the source of the claim, a BPI advocate directed us to a research paper from Latham & Watkins. The law firm analyzed public comments submitted on the proposed Basel III final rules and found that 356 of the 374 letters “opposed the entire proposal or raised substantive concerns about parts of it.”
Public comments on a 316-page piece of financial regulation. . . Surely the American public represents itself, right?
