As we noted last week, Chair Powell answered questions before both Senate Banking and HFSC (see Client Reports FEDERALRESERVE76 and FEDERALRESERVE77) about what’s to come for the embattled Basel-capital standards. Mr. Powell made clear what he wants, but also that he still isn’t sure he can get it. We think he can, albeit with some additional compromises. Interestingly, these compromises will take into account how best to shield the final standards from legal challenge, but not go as far as some sought because agency lawyers have concluded in the wake of recent Supreme Court decisions that anything they do can be challenged by anybody anytime so they might as well do what they think is their best and see what happens next.
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