Press Releases

Today, the House Financial Services Committee is holding a Financial Institutions Subcommittee hearing, led by Subcommittee Chair Andy Barr (KY-06), to outline the U.S. bank capital framework, assess how regulatory capital requirements affect financial institutions of various sizes, and advocate for a more transparent and risk-aligned capital regime.

Read Subcommittee Chair Barr’s opening remarks as prepared for delivery:

"Good morning. Today, this Subcommittee turns its attention to an issue that sits at the heart of American economic strength: our bank capital framework.

"For years, Washington has layered rule upon rule on American banks, forcing them to retain capital at levels that far exceed standards applicable to our global competitors.

"And the results have been detrimental to U.S. firms.

"We have a capital system that increasingly gold-plates international requirements, imposes one-size-fits-all mandates on institutions with different risk and business profiles, and undermines the competitiveness of American institutions.

"Let me be clear, Republicans on this committee support a tailored, common-sense capital framework that protects the safety and soundness of the American financial system.

"But what we do not support is a regulatory framework that needlessly restricts credit, penalizes growth, and places American banks at a disadvantage against foreign competitors who are held to lesser standards.

"Capital should be right-sized to protect the economy. Not inflated for ideological reasons, not used as a tool to achieve political objectives, and not calibrated without regard to the real-world impacts on lending, liquidity, and the economic vitality of local community institutions.

"This is why the Biden Administration’s initial Basel III Endgame proposal was deeply flawed and received bipartisan criticism. It threatened to elevate capital burdens so far above international norms that entire categories of banking business lines, from residential mortgages to market-making, could have migrated to offshore institutions.

"Fortunately, the bipartisan message was clear: the Basel III Endgame must be reproposed. And that re-proposal is not just an opportunity, but a responsibility to get this right.

"We need a framework that is proportional, tailored, and grounded in empirical analysis. We need a framework that recognizes the diversity of the American banking system.

"We must build upon the bipartisan S. 2155 to ensure capital requirements are tailored based on a bank’s size, complexity, and risk profile. Indeed, a regional bank focused on traditional lending should not be subject to the same standards intended for institutions engaged in significant trading, cross-border activities, or complex market operations.

"We must account for growth in the economy by indexing regulatory and category thresholds. This way banks do not stifle their growth when it is needed most.

"If we get this right—if we right-size capital, eliminate unnecessary gold plating, and build a framework that tailors requirements to actual risk—we can preserve what makes American banking exceptional.

"We do not want a barbell banking system in this country, with a number of small banks and GSIBs and nothing in between. Achieving this stems from a well-calibrated capital framework that incentivizes growth and competition, while maintaining safety and soundness.

"We must ensure that community banks continue to serve as economic anchors in small towns and rural communities. We must keep U.S. institutions competitive on the global stage. And we must create a regulatory environment that supports—not strangles—growth, innovation, and opportunity.

"So today, I look forward to hearing from our witnesses about how we can design a capital framework that strengthens stability without sacrificing competitiveness, that respects the structure of the American banking system, and that reins in the excesses of prior regulatory overreach.

"I thank our witnesses for being here today to provide their valuable insights and perspectives, and I yield back."