Bank of America CEO: Capital Requirements Must Ensure ‘Level Playing Field’

Bank of America

Bank of America CEO Brian Moynihan said new capital requirements need to ensure a level playing field for U.S. banks.

“I think they have to be careful as they put in these rules not to make the U.S. less competitive,” Moynihan said in an interview with Fox Business posted Thursday. “We’re not talking about the big eight banks, we’re talking about the idea of a $30 billion, $40 billion bank or $100 billion bank not being able to compete for a middle market loan because a lender to a supplier in Europe is giving a lower cost of capital to that supplier so they can be more competitive to bid for car seats in the car manufacturing process. So, that’s the care that we have to take.”

The interview was posted on the day on which U.S. banking regulators are expected to unveil their proposal for stricter bank capital requirements in line with the Basel III accords, Reuters reported Thursday.

Moynihan said in the interview with Fox Business that the risk weighted assets (RWA) of large banks in Germany, France and England are half of those in the United States.

“Inside the U.S., we have lots of capital inside the industry,” Moynihan said in the interview. “The industry does a great job. They just showed it again as we came through the early part of this year. That job is terrific, and they have lots of capital, lots of liquidity, they’ve been regulated well and they’ve been run well.”

Federal Reserve Chair Jerome Powell said during a June 22 Senate Banking Committee hearing that banks with assets below $100 billion will not be affected by expected new rules requiring banks to keep more capital in the wake of bank collapses in March.

The capital requirements will mainly impact the eight largest U.S. banks, with the upcoming rules expected to apply the Basel III international standards to banks within the $100 billion to $250 billion asset range.

“There may be some capital increases for other banks. None of this should affect banks under $100 billion,” Powell said at the time.

Powell’s remarks were in contrast to previous ones in which Powell said there was a need to tailor regulations for both small and midsized banks, PYMNTS reported at the time.