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Last week, Chairman of the Financial Institutions and Monetary Policy Subcommittee, Andy Barr, and Chairman of the House Financial Services Committee, Patrick McHenry, sent a letter to the Government Accountability Office (GAO) requesting an examination of the role played by U.S. federal banking agencies in the development of the Basel III Endgame proposal. The proposal calls for significant increases in capital requirements for already well-capitalized U.S. financial institutions.

The letter emphasizes the importance of transparency and accountability in the global governance process, particularly when it comes to setting the regulatory framework for the U.S. financial system. The Democrat-appointed federal banking regulatory officials have been proposing a series of new and significant regulatory proposals, and it is crucial to understand how these proposals are being developed behind closed doors.

In their letter, Barr and McHenry state, "Congress has long had concerns about transparency at the Basel Committee," referring to the lack of transparency, accountability, and potential risks associated with international forums such as the Basel Committee on Banking Supervision (BCBS). The letter highlights that Congress authorized the GAO to audit each federal banking agency's participation in international forums due to these concerns.

The GAO's evaluation, as requested by Barr and McHenry, will focus on the following areas:

- A summary of each material proposal submitted by a federal banking agency to the Basel Committee in connection with the development of Basel III Endgame.

- A summary of concerns raised by a federal banking agency with respect to a consultative document or other proposal considered by the Basel Committee, with a particular focus on the Basel Committee's response to those concerns.

The evaluation will prioritize proposals and concerns that did not receive a comprehensive response from the Basel Committee. It will also examine specific aspects of the Basel III Endgame requirements, including the eligibility criteria for reduced risk weight for investment-grade corporate exposures, the approach to operational risk capital for high-fee revenue banks, and the calibration of various coefficients and thresholds.

The letter concludes by expressing appreciation for the prompt attention to this request.

The examination requested by Barr and McHenry seeks to shed light on the decision-making process and provide insight into the development of the Basel III Endgame proposal. It aims to ensure that the U.S. regulatory framework is based on transparent and accountable procedures, protecting the interests of U.S. financial institutions and the broader economy.

To find out more, go to this link: https://barr.house.gov/press-releases?ID=9A88BFFD-5412-4C7C-BDCF-161E7E661700