Yellen snubs banking agencies, avoids backing Basel’s risky game.

TLDR:

Treasury Secretary Janet Yellen declined to take a position on the banking regulators’ Basel III endgame proposal during a hearing before the House Financial Services Committee. Yellen stated that she would leave the Basel questions to the bank regulators and did not provide specific comments on the proposal. However, Yellen did express concerns about the Securities and Exchange Commission’s safeguarding rule and its potential impact on banks’ custody businesses. The Basel III endgame proposal aims to raise capital standards for large banks and has faced opposition from the industry and lawmakers.

Treasury Secretary Janet Yellen has chosen not to support or oppose banking regulators’ Basel III capital proposal, amid intense pressure from large banks and lawmakers. Yellen told the House Financial Services Committee and Maxine Waters, the committee’s ranking member, that she would defer to the bank regulators on the Basel questions. The Basel III endgame proposal seeks to increase capital standards for the largest banks, and has been the subject of TV advertisements, public letters, and threats of a lawsuit as banks fight against the rulemaking. Yellen refused to take a position on the rule, saying, “I’m not going to take a position on the details with the rule.” She added that she regularly shares her thoughts with the heads of the FDIC, OCC, and Federal Reserve. Yellen also expressed concerns about the Securities and Exchange Commission’s safeguarding rule during the hearing. The rule has been criticized by bank regulators for potentially complicating the bank custody business.