Washington, DC – Today, Congressman Lucas and Federal Reserve Chair Jerome Powell discussed the need for a re-proposal of Basel Endgame and plans to address inflation.
On a Basel Re-proposal:
Lucas: “You have reiterated how Members of the Board would like to see a revised Basel proposal put out for public comment, but you’re working through this process with the FDIC and OCC… Given the expected broad revisions, I hope the other Agencies agree that a complete re-proposal would be appropriate. Chairman Powell, could you give us some indication on what the potential timeline around a decision to re-propose could look like?”
Powell: “It is pretty uncertain… A baseline might be that we agree on a re-proposal of some kind that gives the public the chance to see these changes and react to them and write comment letters… that probably puts you well into next year. These are rules that banks are going to have to live with for a long time and we need to get them right. It’s not something we should be hurrying on – we need to take our time and get it right.”
On Addressing Inflation:
Lucas: “Folks back home are very concerned about inflation… When inflation isn’t effectively dealt with, it can spiral out of control. Could you expand for a little bit more about your approach when dealing with inflation in a way that doesn’t repeat the mistakes of the past?”
Powell: “One of the big lessons from the high inflation in the 70s… is that it’s really on the central banks to be on the case and do the job… Really, that is up to the central banks… That is an internalized lesson for people in central banking these days. We are committed to bringing inflation down sustainably to 2%.”
Click here to watch Lucas’ full Q&A (07/10/2024).