Fed’s Bowman Signals New Mortgage Capital Rules for US Banks

The Federal Reserve is poised to release an updated and revised Basel III Endgame framework for the banking system soon. One change could be new mortgage capital requirements for U.S. banks. Fed Vice Chair for Supervision Michelle Bowman has said the central bank is inching closer to unveiling new mortgage-loan requirements. Bowman, speaking at an American Bankers Association event on Feb. 16, said regulators are weighing ways to make capital requirements for residential mortgages more “risk‑sensitive.” One option under consideration would tie a mortgage’s risk weight to its loan‑to‑value ratio, replacing the current one‑size‑fits‑all approach....