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The Week Ahead: Congress to Examine Bank Capital Regulation

American Money BHWith the Fed scheduled to release the results of its annual stress test near the end of June, the Senate Banking Committee [1] will hold a hearing titled “Bank Capital and Liquidity Regulation [2]” on Tuesday, June 7 at 10 a.m. EST.

According to the Senate Banking Committee, witnesses at the hearing will be Dr. Hal Scott, Nomura Professor and Director of the Program on International Financial Systems, Harvard Law School; Dr. Marvin Goodfriend, The Friends of Allan Meltzer Professor of Economics, Tepper School of Business at Carnegie Mellon University; Prof. Heidi Mandanis Schooner, Professor of Law, Columbus School of Law, The Catholic University of America; and Dr. Paul H. Kupiec, Resident Scholar, American Enterprise Institute.

Fed governors Daniel Tarullo and Jerome Powell said last week in separate public addresses [3] that stress test requirements will get tougher for institutions the government has deemed systemically important, namely Bank of America, Citigroup, Goldman Sachs Group, Inc., JPMorgan Chase, Morgan Stanley, Wells Fargo & Co., State Street Corp., and Bank of New York Mellon Corp. Tarullo and Powell both stated that the tougher stress test criteria will include requiring the banks to hold significantly more capital.

Capital requirements for the banks have been significantly raised since the financial crisis in 2008, which has forced the banks to evaluate whether or not they can maintain their current size and still be profitable.

The hearing will be streamed live on the Senate Banking Committee’s website [2].

Republicans’ plan to replace Dodd-Frank—Tuesday, June 7, 8 a.m. EST

House Financial Services Committee [4] Chairman Jeb Hensarling (R-Texas) will unveil his party’s plan to replace the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 during a speech at the Economic Club of New York on Tuesday.

Hensarling has said his plan will be simpler than the 2,300-page Dodd-Frank Act but at the same time will be tougher on Wall Street than Dodd-Frank. Republicans have long criticized Dodd-Frank for what they perceive as using a “one size fits all” approach to reforming Wall Street that has adversely affected Main Street. Democrats have fiercely resisted any attempts by the GOP to roll back or chip away at Dodd-Frank and have vowed that they will continue to do so.

Hensarling’s speech can be streamed live here [5].

Tuesday, June 7

Rep. Jeb Hensarling will unveil the Republicans' plan to replace Dodd Frank in a speech at the Economic Club of New York, 8 a.m. EST

Senate Banking Committee Hearing, Bank Capital and Liquidity Regulation, 10 a.m. EST

Consumer Credit Report for April 2016, Federal Reserve, 3 p.m. EST

Wednesday, June 8

Job Openings and Labor Turnover Summary (JOLTS) for April 2016, Bureau of Labor Statistics, 10 a.m. EST


Friday, June 10

Consumer Sentiment for June 2016, University of Michigan Consumer Survey Center, 10 a.m.