Today, the U.S. House of Representatives passed H.R. 4296, sponsored by Subcommittee on Financial Institutions and Consumer Credit Chairman Blaine Luetkemeyer (MO-03). Chairman Luetkemeyer released the following statement:

“I’m happy to see the House pass yet another common sense financial reform to improve the efficiency of our financial system and remove misguided regulations,” said Chairman Luetkemeyer. “The implementation of the Basel Committee’s operational risk requirements has forced American banks to hold billions of dollars in reserve to account for activities they no longer practice. That means billions of dollars are currently sitting in banks across the nation instead of being lent to help businesses grow and create jobs in their communities.  My bill takes a different approach, calculating reserve capital based on an organization’s current risk and business model. With this common sense change, banks will continue to hold enough capital to manage risk while unshackling billions of dollars and injecting it into the  U.S. economy.”

Background: H.R. 4296  will replace misguided capital standards imposed by the international standard setters at the Basel Committee by amending the method by which reserve capital is calculated. The methods-based approach proposed in H.R. 4296 properly calibrates operational capital requirements by focusing on current risk.                                                                        

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