Powell Signals Retreat on Proposed Banking Rules Amid Commercial Real Estate Concerns
-
Jay Powell signaled a retreat on proposed new banking rules that would force lenders to beef up their books. He said there will be "broad and material changes" to the proposals.
-
The rules, known as "Basel III Endgame," would require the largest banks to set aside a bigger emergency cushion to handle losses from potential crises.
-
But the rules have faced criticism from banks, lobbyists, and some lawmakers who fear crimped lending when banks face upheaval in commercial real estate.
-
A risk in commercial real estate came into focus when New York Community Bank, facing a mountain of souring real estate loans, saw its stock plummet as it sought emergency funding.
-
The original proposals aimed to avoid a repeat of issues like last year's Silicon Valley Bank collapse, which prompted a wider crisis.