Federal Reserve Chairman Jerome Powell emphasized the Fed's readiness to listen and improve the capital framework for large banks.
Mr. Powell reaffirmed the goal of enabling large banks to compete freely, both with non-bank institutions and foreign banks, without mentioning the outlook for economic or monetary policy.
MAIN CONTENT
The Fed is open to new ideas to improve the capital framework for large banks.
Ensure free competition between large banks, non-bank institutions, and international banks.
The Fed chairman did not mention economic outlook or monetary policy in the speech.
How is the Federal Reserve prepared to improve the capital framework for large banks?
Mr. Jerome Powell affirmed that the Fed is a flexible organization, actively listening to opinions to enhance the effectiveness of the capital framework, ensuring safety and financial stability for large banks. This is a strategy to strengthen the national financial system, based on management experience over the years.
We are committed to creating a capital framework that is not only stringent but also flexible enough for large banks to sustainably develop in an increasingly diverse competitive environment.
Jerome Powell, Chairman of the Federal Reserve, July 2024
This adjustment helps banks balance risk and capital raising capacity while supporting overall economic development. The Fed's annual reports also indicate the positive impact of improvements in the capital framework.
Why does the Fed emphasize free competition among large banks and other institutions?
Mr. Powell's views reflect a deep awareness of the modern financial market, where non-bank institutions and international banks are playing an increasingly significant role. A fair competition framework will foster innovation and efficiency on a broad scale.
When large banks and other institutions are given equal opportunities, the market will become more competitive, thereby bringing real benefits to consumers and the entire economy.
Jerome Powell, speaking at the Global Finance Conference, 2024
This also helps minimize systemic risk when all institutions must comply with appropriate regulations, in the context of increasing globalization and rising cross-border capital flows.
Did the Fed chairman mention the outlook for monetary policy in the speech?
Jerome Powell did not present on economic outlook or monetary policy direction in this speech. Instead, he focused on technical aspects of bank management to create long-term stability.
This is often seen in in-depth speeches on financial structure, as the Fed considers multi-dimensional impacts before adjusting macroeconomic monetary policy appropriately.
What benefits will large banks gain from the Fed improving the capital framework?
When the capital framework is optimized, large banks will enhance their competitiveness, minimize bankruptcy risks, and credit difficulties. This helps maintain healthy liquidity and increase investor confidence.
Financial analysts believe this is an important step to strengthen the stability of the banking system in the context of an economy with many fluctuations.
Is there a significant difference in the capital framework of domestic and international banks?
The Fed is making efforts to adjust to create a level playing field between domestic banks and banks in other regions, ensuring appropriate rules and capital standards, minimizing risks from uneven tightening or loosening of capital.
This synchronization also supports more efficient liquidity and cross-border trade, helping Vietnamese and global banks adapt to the rapid development of the cryptocurrency market and global finance.
Frequently Asked Questions
What does Fed Chairman Jerome Powell want to convey through this speech?
Mr. Powell emphasized the Fed's openness to listen and improve the capital framework to ensure large banks compete fairly.
Did the Fed mention monetary policy in the speech?
No, the speech focused on the bank's capital structure without discussing monetary policy or macroeconomic issues.
How does improving the capital framework benefit large banks?
It enhances competitiveness, reduces financial risk, and strengthens the stability of the banking system.
Does the Fed support competition between banks and non-bank institutions?
Yes, the Fed facilitates fair competition between banks and non-bank institutions as well as foreign banks.
The importance of creating a level playing field between domestic and international banks?
Helps reduce financial risk, enhance operational efficiency, and promote international liquidity.
Source: https://tintucbitcoin.com/powell-fed-linh-hoat-lang-nghe-y-tuong-moi/
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