Venue: Federal (filed with the Federal Reserve, FDIC and OCC)
Date filed: January 16, 2024
On Tuesday, January 16, 2024, the Electric Power Supply Association joined the Coalition for Derivatives End-Users comment letter filed with federal financial regulators (Federal Reserve, FDIC, and OCC) regarding their joint proposed rules to strengthen capital requirements for large banks. As proposed, the so-called Basel III Endgame and related GSIB Surcharge Proposals (US Bank Capital Proposals) contain provisions that will increase the costs for banks that provide access to futures and derivatives markets. Ultimately, the Basel III Endgame and GSIB Surcharge Proposals will exacerbate capital challenges facing futures commission merchants (FCMs), making central clearing more expensive and raising the cost of hedging for end-users (including energy, as well as agricultural, industrial, and other industries). The detailed Coalition letter addresses the significant concerns posed by the US Bank Capital Proposals and offers a number of recommended modifications to the proposals. The Coalition comment letter includes 103 end-user company and trade association signatories from a broad range of potentially impacted industries.