A top US regulator has pushed back at banks’ claims that stricter capital rules will increase borrowing costs, saying the lenders could always cut dividends and buybacks instead.
The comments from Michael Hsu, acting director of the Office of the Comptroller of the Currency, are the latest shot across the bow to banks, which have complained for months about regulators’ plans for stricter rules under the so-called Basel III endgame framework.
“The banking industry has said the new rules are going to hurt all kinds of folks in the real economy,” Hsu told the Financial Times. “I have encouraged them — provide analysis on what your share buybacks and dividend policies are going to be under these different scenarios. Because there’s a choice to be made with capital.”