BPI and FSF Comment on GSIB Capital Surcharges Rule

Ladies and Gentlemen:

The Financial Services Forum (the "Forum") and the Bank Policy Institute^[1] appreciate the opportunity to submit this letter to the Board of Governors of the Federal Reserve System (the "FRB") regarding its proposed rule on capital surcharges for global systemically important bank holding companies ("GSIBs") and the Systemic Risk Report (FR Y-15) (the "Proposal").^[2] The proposed changes would apply to all of the Forum's member institutions ("member institutions"), the U.S. GSIBs.

The FRB adopted a final rule in 2015 (the "2015 Rule") to establish a methodology to identify U.S. GSIBs and assign each a risk-based capital surcharge. The 2015 Rule was designed to capture a U.S. GSIB's systemic importance, such that the U.S. GSIBs are required to hold additional capital relative to other non-GSIB banking organizations.^[3] The "principal statutory impetus" for the GSIB surcharge is the Dodd-Frank Act's mandate that the FRB "adopt enhanced capital standards to mitigate the risk posed to financial stability by certain large financial institutions."^[4] As we have pointed out on numerous occasions, the 2015 Rule is methodologically flawed, including because the method 2 coefficients have not been recalibrated to account for over a decade of economic growth since the original calibration period, resulting in GSIB surcharges that overstate the systemic importance of U.S. GSIBs relative to the original calibration.

Our member institutions play an essential role in providing credit, liquidity and a range of key financial services that are fundamental to the continued growth and prosperity of the U.S. economy. The ability of our member institutions to play this role, however, critically depends on efficiently calibrated capital requirements. In this regard, we commend the FRB for acknowledging and seeking to address the 2015 Rule's longstanding methodological flaws that have resulted in over-calibrated GSIB surcharges. In particular, the initial and ongoing adjustments to the method 2 coefficients to account for economic growth represent a meaningful step towards a surcharge framework that better aligns with actual systemic risk. It is critical however, that: (1) these adjustments fully reflect the inflation in method 2 scores since the original calibration period; (2) the benefits of the FRB's recalibration efforts not be delayed by continued application of a flawed methodology; and (3) any revisions to the indicators provide meaningful benefit to measuring or reducing systemic risk.

To read the full comment letter, please click here, or click on the download button below.

[1] The Financial Services Forum is an economic policy and advocacy organization whose members are the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors and communities throughout the country. The Forum promotes policies that support savings and investment, deep and liquid capital markets, a competitive global marketplace and a sound financial system.
The Bank Policy Institute is a nonpartisan public policy, research and advocacy group, representing the nation's leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation's small business loans, and are an engine for financial innovation and economic growth.

[2] Regulatory Capital Rule (Regulation Q): Risk-Based Capital Surcharges for Global Systemically Important Bank Holding Companies; Systemic Risk Report (FR Y-15), 91 Fed. Reg. 14908 (Mar. 27, 2026).

[3] Regulatory Capital Rules: Implementation of Risk-Based Capital Surcharges for Global Systemically Important Bank Holding Companies, 80 Fed. Reg. 49082, 49082 (Aug. 14, 2015).

[4] 80 Fed. Reg. at 49109.