Stricter capital rules proposal  – issued by a split Fed Board – will likely result in a final rule with ‘broad support,’ Fed leader expects

A final rule on stricter capital requirements (implementing the so-called “Basel III endgame”) will reflect “broad support” on the Federal Reserve Board, the agency’s chair said Wednesday.

During a press conference following the announcement of the Fed’s interest-rate setting Federal Open Market Committee (FOMC), Fed Board Chair Jerome H. (“Jay”) Powell said the Fed board is a “consensus-driven” group. He said he expects the rule, following the end of the comment period (which ends Jan. 16, the same date a data collection on the impact of the proposal ends), will be issued only after careful consideration of all comments.

The proposal was issued on a vote of 4-2 by the Fed Board in July, with Govs. Michelle Bowman and Christopher Waller dissenting.

However, Powell said whatever form the final rule takes – considering comments received – he expects “broad support” from the Fed Board. When pressed by a reporter what that means (such as better support than the 4-2 vote the proposal received), Powell responded “broad support means broad support.”