Iran-Related Shocks to ‘Hollow Out’ US Long-Term Growth, Says Gary Gensler

Former SEC Chair Gary Gensler discusses his outlook for the US economy amid ongoing shocks from the conflict in Iran. He also touches on private credit jitters and AI adoption.

Wall Street lending giants would get relaxed capital requirements under proposals unveiled by the Federal Reserve on Thursday, in a move that could potentially unleash billions of dollars for lending, share buybacks and dividends.
“These changes would strengthen our overall capital framework, which would remain robust under the new regime,” Fed Vice Chair for Supervision Michelle Bowman said in a statement. 
The package of proposals, which are subject to a 90-day public consultation before they can be finalized, were crafted by officials at the Fed, in addition to the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.
The Fed’s Board of Governors will vote to formally propose the plan Thursday. The FDIC board is holding a concurrent meeting.
Officials are pitching the landmark package as part of a harmonization of capital. If finalized, these plans — along with moves to ease the enhanced supplementary leverage ratio and overhaul stress tests — would amount to some of the biggest bank-capital rule changes since those enacted following the 2008 global financial crisis.
The proposals, when combined, are expected to result in a “moderate decrease” in capital requirements for some banks, the Fed said in a memo. For the biggest banks, common equity tier 1 capital — the highest quality of regulatory capital — are projected to decrease by 4.8% in aggregate, while midsize banks would see an aggregate reduction of 5.2%.
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