U.S. Senator Katie Britt Questions Fed Chair Powell on Long-Term Debt Proposed Rule and Doubles Down Against Basel III Endgame
Emphasizes commodities damage and direct consequences to Alabama’s economy
WASHINGTON, D.C., July 12, 2024 – U.S. Senator Katie Britt (R-Ala.) this week questioned Chair of the U.S. Federal Reserve (the Fed) Jerome Powell during a Banking, Housing, and Urban Affairs Committee hearing. She voiced concerns over the long-term debt proposed rule and instituting it prior to the full implementation of the Basel III Endgame proposal.
“Chair Powell, I have repeatedly talked about my concern with [the] long-term debt proposal and just think that it has not been well thought through,” said Senator Britt. “First, I have concerns that it blatantly undermines the tailoring requirement. And on that note, do you believe that (S.) 2155 will be applicable to the long-term debt requirement?”
A video of Senator Britt’s line of questioning can be viewed here.
Chair Powell replied in the affirmative, stating, “I think it applies to everything. And on the long-term debt requirement, you know, we have voluminous comments that we’re looking at carefully and thinking through the process of what to do about them.”
Senator Britt noted that in addition to undermining the tailoring requirement for financial institutions enacted by Congress in S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, the proposed rule also lacks a proper cost-benefit analysis.
Senator Britt went further asking if it would be “inappropriate to move forward with the long-term debt proposal, finalizing that rule, prior to Basel III [Endgame] being finalized as well?”
Powell said, “I can’t give you a clear answer on that. It will depend. Basel III won’t be finally finalized for some time…”
Senator Britt has previously questioned federal regulators on the harmful Basel III Endgame proposed rule. Today, the Senator again highlighted the negative impact of a revised Basel III on commodity markets.
“[O]ur agriculture industry is one in five jobs in the state of Alabama, it’s 20% of our economy,” Senator Britt remarked today. “I am a big believer [that] food security is national security, and the proposal would increase hedging costs by 80%, meaning banks would be far less likely, or inclined, to offer clearing services. This could have a detrimental effect to our agriculture community and increase other costs providing food and fiber for our nation. When you look at inputs such as feed, seed, fertilizer prices, those have skyrocketed and prices have ended up just getting passed down to the consumer. I mean, grocery prices are up 21% since January [2021].”
Chair Powell declined to mention the specific changes the Federal Reserve was considering to the proposal, but did note he was “very well aware of and very focused” on the multitude of issues from across industries raised on Basel III Endgame.
Senator Britt concluded her remarks by reminding Chair Powell that “finding solutions to expanding affordable child care is a top priority . . . and it is something that I know a number of my colleagues on the other side of the aisle share an interest in and believe is an important issue as well.”
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High quality video of Senator Britt’s line of questioning can be downloaded for media usage here.