H. R. 4296, To Place Requirements on Operational Risk Capital Requirements for Banking Organizations Established by an Appropriate Federal Banking Agency

This bill would prohibit federal banking agencies from establishing an operational-risk capital requirement (i.e. money & non-cash assets that have to be held in reserve) for banks unless the requirement: 1) is based on, and is appropriately sensitive to, current risks; 2) is determined under a forward-looking assessment of potential losses — rather than only considering historic losses;  and 3) allows certain adjustments.

Why Jason Lewis’ vote is against our values

“According to bank regulators and the Treasury Department, efforts have been underway internationally to make administrative and technical refinements to the operational risk capital requirement, and we should expect changes in the near future. Congress should closely monitor these developments to see if regulators strike the right balance, and if not, then consider a legislative response. Thus, H.R. 4296 is premature and possibly short-sighted to enact statutory conditions regarding the operational risk capital requirement. This framework would diminish, instead of strengthen, the incentive for megabanks to maintain stronger internal controls and risk management systems.” (Source: Minority Views, House Report 115-574, Committee on Financial Services

“This bill is a transparent effort to boost big bank profits by pressuring regulators to weaken public protections. If it were passed, major Wall Street banks could increase their borrowing and reduce the private capital they hold to protect the financial system and the public against the effects of a megabank failure.” (Source: Americans for Financial Reform)


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