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WASHINGTON: Members of the US Federal Reserve’s governing body voiced disagreements over proposed changes to banking rules in a rare open meeting of the board Thursday.

The proposals put forward by Michael Barr, the Fed’s vice chair for supervision, call for a range of measures including increased capital requirements for large and mid-sized banks, and changes to how they measure risk.

While the moves to finalize the so-called Basel III agreement — developed in response to the financial crisis of 2007-2009 — have been under consideration for some time, the new proposals contain changes made following the banking crisis in March, the Fed said in a statement.

We are still monitoring the banks’ situation very carefully: Fed’s Powell

The recent banking turmoil in US and Europe was sparked by the sudden collapse of regional lender Silicon Valley Bank after it took on excessive interest-rate risk.

“The goal of our actions today is simple: to increase the strength and resilience of the banking system by better aligning capital requirements with risk,” Barr told the meeting of officials in Washington.But two Fed governors took the unusual step of publicly disagreeing with his proposals, putting on the record their strong opposition to certain steps — especially a proposal to raise capital requirements for some banks by an average of 16 percent.

Governor Michelle Bowman said she was concerned the proposal “will add to the challenges facing the US banking system, and impose real costs on banks, their customers, and the economy without commensurate benefits to safety and soundness or financial stability.”

Fed governor Christopher Waller told the meeting: “I don’t think those costs are worth bearing without clear benefits to the resiliency of the financial system.”

The president of the American Bankers Association, Rob Nichols, called the proposals “unnecessary and overly broad.”

“Far from simply meeting international standards, these changes will require banks operating in the U.S. to meet even higher capital levels without any justification,” he said in a statement.

Thursday’s open meeting of the board provided a rare glimpse of the Fed’s decision-making process.

During the meeting, Fed chair Jerome Powell indicated he was in favor of hearing from the public during the longer-than-usual review period, which runs until November 30.

“Congress and the American people rightly expect us to achieve an effective and efficient regulatory regime that keeps our financial system strong and protects our economy, while imposing no more burden than is necessary,” he said.

“I look forward to hearing from all stakeholders on how best to strike that balance,” he added.

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