“Do Your Thing” – NBC New York

• Senator Elizabeth Warren accuses Fed Chair Jerome Powell of pandering to the financial industry when considering changes to Basel III Endgame rules.
• In a letter first obtained by CNBC, Warren asked Powell to respond to reports that you “support halving” the capital raise required under the proposals.
• Bank presidents and their lobbying groups said the increases were unnecessarily aggressive and would force the industry to limit lending.

senator Elizabeth Warren accuses the Fed chairman Jerome Powell comply with the financial industry’s orders by considering changes to a broad set of regulations aimed at increasing the capital cushion that large U.S. banks would be required to have.

In a June 17 letter first obtained by CNBC, Warren asked Powell to respond to reports that he “supports cutting in half” the capital increase required under the proposal, known as “End Basel III.”

“I am disappointed by news reports indicating that, after numerous meetings with the CEOs of large banks, you are personally intervening to delay and relax Basel III capital rules,” said Warren, D-Mass.

Last year, three U.S. banking regulators, including the Federal Reserve, unveiled proposed rules, a long-awaited regime change on bank capital and risky activities such as trading and lending. The regulations take into account new international standards created in response to the 2008 global financial crisis.

“These rules are critical and long overdue, especially in the wake of the failures of Silicon Valley and the Signature Bank, as well as the risks from a weak commercial real estate market and other economic threats spreading through the banking system,” Warren said.

Bank presidents and their lobbying groups said the increases were unnecessarily aggressive and would force the industry to limit lending.

In March, Powell told lawmakers he expected “broad and significant changes” to the proposal following an industry campaign against the regulations. CEO of JPMorgan Chase Jamie Dimon a concerted effort to weaken the rules, urging CEOs to go directly to Powell, as the Wall Street Journal reported last month.

“You now appear to be directly doing the bidding of the banking industry by rewarding them for their extensive, personal lobbying of you,” Warren said in her letter. “Taking orders from the industry that caused the economic crash of 2008 would sacrifice the financial security of the middle class and working families to line the pockets of wealthy investors and CEOs.”

She then criticized Powell, saying the Fed-led “regulatory rollback” allowed a regional banking crisis in 2023 and “enriched Jamie Dimon and his Wall Street cronies.”

Warren urged Powell to allow the Federal Reserve Board to vote on Basel’s original, tougher proposal by the end of this month. The window to finalize and approve the regulations before the November U.S. elections is closing, and analysts say the proposal could be delayed or invalidated if Donald Trump is re-elected president.

“Instead of following Mr. Dimon’s orders, you should do your job and allow the board to convene by June 30 to vote on a 16% capital increase because global regulators have deemed it necessary to prevent another financial crisis,” he said Warren.

The Fed did not immediately respond to a request for comment on Warren’s letter.