U.S. GOVERNMENT PUBLISHING OFFICE

56–436 PDF WASHINGTON : 2024

IMPORTING GLOBAL GOVERNANCE: 

EXAMINING THE DANGERS OF 

CEDING AUTHORITY OVER 

AMERICAN FINANCIAL REGULATION 

HEARING 

BEFORE THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED EIGHTEENTH CONGRESS 

SECOND SESSION 

MARCH 21, 2024 

Printed for the use of the Committee on Financial Services 

Serial No. 118–85 

( 
(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

PATRICK MCHENRY, North Carolina, Chairman 

FRANK D. LUCAS, Oklahoma 

PETE SESSIONS, Texas 

BILL POSEY, Florida 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

ANN WAGNER, Missouri 

ANDY BARR, Kentucky 

ROGER WILLIAMS, Texas 

FRENCH HILL, Arkansas, Vice Chairman 

TOM EMMER, Minnesota 

BARRY LOUDERMILK, Georgia 

ALEXANDER X. MOONEY, West Virginia 

WARREN DAVIDSON, Ohio 

JOHN ROSE, Tennessee 

BRYAN STEIL, Wisconsin 

WILLIAM TIMMONS, South Carolina 

RALPH NORMAN, South Carolina 

DAN MEUSER, Pennsylvania 

SCOTT FITZGERALD, Wisconsin 

ANDREW GARBARINO, New York 

YOUNG KIM, California 

BYRON DONALDS, Florida 

MIKE FLOOD, Nebraska 

MIKE LAWLER, New York 

ZACH NUNN, Iowa 

MONICA DE LA CRUZ, Texas 

ERIN HOUCHIN, Indiana 

ANDY OGLES, Tennessee 

MAXINE WATERS, California, Ranking 

Member 

NYDIA M. VELA ́ ZQUEZ, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

DAVID SCOTT, Georgia 

STEPHEN F. LYNCH, Massachusetts 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

JIM A. HIMES, Connecticut 

BILL FOSTER, Illinois 

JOYCE BEATTY, Ohio 

JUAN VARGAS, California 

JOSH GOTTHEIMER, New Jersey 

VICENTE GONZALEZ, Texas 

SEAN CASTEN, Illinois 

AYANNA PRESSLEY, Massachusetts 

STEVEN HORSFORD, Nevada 

RASHIDA TLAIB, Michigan 

RITCHIE TORRES, New York 

SYLVIA GARCIA, Texas 

NIKEMA WILLIAMS, Georgia 

WILEY NICKEL, North Carolina 

BRITTANY PETTERSEN, Colorado 

MATT HOFFMANN, Staff Director 
(III) 

C O N T E N T S 

Page 

Hearing held on: 

March 21, 2024 ................................................................................................. 1 

Appendix: 

March 21, 2024 ................................................................................................. 47 

WITNESSES 

THURSDAY, MARCH 21, 2024 

Billingsley, Ryan, Deputy Director, Capital Markets & Accounting Policy, 

Division of Risk Management Supervision, Federal Deposit Insurance Corporation (FDIC) .................................................................................................... 6 

Gardineer, Grovetta N., Senior Deputy Comptroller for Bank Supervision 

Policy, Office of the Comptroller of the Currency (OCC) .................................. 8 

Gibson, Michael S., Director, Supervision and Regulation, Board of Governors 

of the Federal Reserve System (Fed) .................................................................. 5 

APPENDIX 

Prepared statements: 

Billingsley, Ryan ............................................................................................... 48 

Gardineer, Grovetta N. .................................................................................... 56 

Gibson, Michael S. ............................................................................................ 64 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Billingsley, Ryan: 

Written responses to questions for the record from Representative Barr ... 69 

Written responses to questions for the record from Representative 

Meuser ........................................................................................................... 82 

Gardineer, Grovetta N.: 

Written responses to questions for the record from Representative Barr ... 85 

Gibson, Michael S.: 

Written responses to questions for the record from Chairman McHenry .... 96 

Written responses to questions for the record from Representative Barr ... 99 

Written responses to questions for the record from Representative 

Huizenga ........................................................................................................ 113 

Written responses to questions for the record from Representative Kim .... 116 

Written responses to questions for the record from Representative 

Meuser ........................................................................................................... 118 

Written responses to questions for the record from Representative Steil ... 120 

(1) 

IMPORTING GLOBAL GOVERNANCE: 

EXAMINING THE DANGERS OF 

CEDING AUTHORITY OVER 

AMERICAN FINANCIAL REGULATION 

Thursday, March 21, 2024 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The committee met, pursuant to notice, at 10:08 a.m., in room 

2128, Rayburn House Office Building, Hon. Patrick McHenry 

[chairman of the committee] presiding. 

Members present: Representatives McHenry, Lucas, Sessions, 

Posey, Luetkemeyer, Huizenga, Wagner, Barr, Williams of Texas, 

Hill, Loudermilk, Mooney, Davidson, Rose, Steil, Norman, Meuser, 

Fitzgerald, Garbarino, Kim, Donalds, Flood, Lawler, Nunn, De La 

Cruz, Ogles; Waters, Sherman, Scott, Lynch, Green, Cleaver, 

Himes, Foster, Beatty, Vargas, Gottheimer, Gonzalez, Casten, 

Horsford, Tlaib, Torres, Garcia, Nickel, and Pettersen. 

Chairman MCHENRY. The Financial Services Committee will 

come to order. 

Without objection, the Chair is authorized to declare a recess of 

the committee at any time. 

Today’s hearing is entitled, ‘‘Importing Global Governance: Examining the Dangers of Ceding Authority Over American Financial 

Regulation.’’ 

I will now recognize myself for 4 minutes to give an opening 

statement. 

I want to thank our witnesses for being here. Today, we will examine the dangers of ceding authority of American financial regulation to global governance bodies. This hearing is a good governance exercise. Currently, there is little visibility into the dealings 

between our financial regulators and a complex network of international bureaucrats. This includes the Bank for International Settlements (BIS), the Basel Committee on Banking Supervision 

(BCBS), and the Network for Greening the Financial System 

(NGFS), just to name a few. 

That lack of transparency and accountability raises concerns 

about the extent to which other countries are influencing financial 

regulation here in the United States. In fact, as recently as 2017, 

Russian and Chinese Communist Party (CCP) banking officials 

have been scrubbing U.S. laws, regulations, and supervisory practices for compliance with Basel rules, sometimes physically on site 

here at U.S. agencies. That is absurd. To be clear, international co-
2 

operation can be positive and help set clear rules of the road for 

financial markets. However, when the scale repeatedly tips in favor 

of our competitors, we have a problem. 

The most glaring example of Federal banking agencies taking 

their cues from global governance bodies is the Basel III Endgame 

proposal. We have heard concerns from Members on both sides of 

the aisle about the impact of increased capital requirements on 

families, communities, and small businesses, but the proposal 

would also strengthen the competitiveness of foreign financial institutions at the expense of our own. Why would American banking 

regulators work to weaken our standing on the global stage? 

This is just the first of many questions we have for today’s witnesses from the Federal Reserve (Fed), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the 

Currency (OCC). While you are not the ones setting policy for your 

respective agencies, you have insight into your organization’s deliberations, negotiations, and discussions with these international forums. That is what we are seeking. 

I would also remind you that you have a responsibility to be 

transparent with Congress and the American people we represent 

as we work to fulfill our obligation of checks and balances in our 

system and as we work to fill in the blanks, the many blanks that 

are currently obvious to us on the Hill. 

Unfortunately, the lack of transparency by President Biden’s 

banking regulators feels more like a feature than a bug. When Congress has zero visibility into the agency officials and staff participating in various workstreams in the global governance bodies, traditionally-independent regulators become a breeding ground for 

politics and partisanship. 

That is why today, we will consider a bill to create clear reporting requirements for American financial regulators dealing with 

global governance groups and provide insight into global deal-making. This bill brings financial regulators in line with other American officials, like those of the State Department and the U.S. 

Trade Representative that adhere to clear reporting structures regarding their involvement overseas. 

I will finish with this. President Biden’s banking regulars are attempting to force progressive pet projects, all pushed by global governance bodies through our financial system. And for those who 

like those policies in the other party here on the committee, I 

would tell you, when the coin flips, I don’t think you will like the 

results of an opaque process in international regulation. I don’t 

think you will like this. So overall, I think this should be a good 

governance operation for us to get insight into how these regulators 

are making decisions. That is where I want to end. 

I will now recognize the ranking member of the committee, the 

gentlewoman from California, Ms. Waters, for 4 minutes. 

Ms. WATERS. Thank you very much, Mr. Chairman. Good morning. Last week, we marked the 1-year anniversary of the failures 

of Silicon Valley Bank and Signature Bank, with First Republic 

failing soon thereafter. These features represented the second, 

third, and fourth largest bank failures in United States history and 

threatened to snowball into a full-blown banking crisis. Thankfully, 

the actions of President Biden, Secretary Yellen, and the banking 
3 

regulators testifying today stabilized the situation, averting a 

banking crisis, and protected our nation’s depositors. Because of 

their swift action, our banking system remains strong. Unfortunately, it seems as if Republicans and big banks are pretending 

like none of this ever happened. As our banking regulators move 

to write rules that would address weaknesses in our banking system, including on bank capital and related to the climate crisis, Republicans are convening this hearing to attack any effort to collaborate with other countries that face the same problems. 

Right now, the global climate crisis is getting even worse, as evidenced by the record-breaking heat, floods, storms, droughts, and 

wildfires that communities across the United States are experiencing. In the face of this crisis, we are seeing big banks and major 

financial institutions give into extreme MAGA Republicans and 

walk back many of the climate commitments they made to 

strengthen our banking system. 

Just last year, Bank of America walked back its commitment and 

began financing new coal mines, coal-burning power plants, and 

Arctic drilling projects. In addition, JPMorgan, State Street, 

PIMCO, and BlackRock all pulled out of an international coalition 

aimed at addressing climate issues. Let’s be clear: Climate change 

is real, and climate-related-financial risk must not be ignored. It is 

critical that our financial institutions take these threats seriously 

instead of feeding into the extreme MAGA Republican’s anti-ESG 

campaign. 

As if that wasn’t bad enough, big banks are spending millions of 

dollars to gut the proposed Basel III Endgame rule to increase capital. Over the last several months, their executives have proven 

that they care more about protecting their million-dollar bonuses 

and further padding their pockets than they do about making 

Americans’ banking stronger in the service of working families. 

Today, you will hear Republicans try to undermine our regulators as the regulators collaborate with their foreign counterparts 

to ensure that our global and interconnected financial system is 

strong. This adds to the long history Republicans have of abandoning our international partners and hurting our global standing 

in the process. Time and time again, Republicans shamelessly defend comments made by twice-impeached, 4-times-indicted, former 

President Trump, who attacks our partners in NATO and the U.N. 

Let’s be clear: Extreme MAGA Republicans’ hostility toward our allies is terrible for America and only weakens us as a nation. 

The US. banking system has the potential to be the strongest in 

the world, but we can’t get there if our nation’s most powerful 

banks and financial institutions block the government from devising policy that protects our nation’s consumers. Rest assured, Committee Democrats are fighting back and working around the clock 

to strengthen the safety and soundness of the banking system, protect depositors, and prevent future financial crises. I don’t know 

what more I can say. With that, I yield back the balance of my 

time. 

Chairman MCHENRY. The ranking member yields back. I will 

now recognize the Chair of our Subcommittee on Financial Institutions and Monetary Policy, Mr. Barr, for 1 minute. 
4 

Mr. BARR. Well, that was something. Today, we will discuss the 

interplay among financial regulators and a growing and tangled 

web of global governance bodies, such as the Basel Committee on 

Banking Supervision, the Bank of International Settlements, and 

the Network for the Greening of the Financial System. The American people and their elected representatives know next to nothing 

about how U.S. regulatory agencies negotiate deals within these 

bodies. Those deals, we are told, are nonbinding, yet they become 

binding when U.S. regulators abide by them and respond to pressure from the global governance web to comply. 

Recently, we have seen global governance in action with reference to some framework agreements in the Basel III Endgame 

that no elected official negotiated or signed. This begs the question, 

who is in charge? We will seek answers, since it appears that 

unelected bureaucrats and global governance bodies have the abilities to bypass Congress, U.S. law, and even governing boards of 

Federal financial regulators to achieve their goals. 

Chairman MCHENRY. The gentleman’s time has expired. The 

Chair now recognizes the ranking member of our Subcommittee on 

Financial Institutions and Monetary Policy, Mr. Foster, for 1 

minute. 

Mr. FOSTER. Thank you, Mr. Chairman, and thank you to our 

witnesses. As the global economy changes, financial firms and their 

regulators must remain well-apprised of new and emerging risks. 

Geopolitical tensions, climate change, and emerging technologies 

like AI pose new challenges that will affect not only the economy 

of the United States, but economies from around the world. The 

BIS estimates there are nearly $38 trillion of cross-border claims 

among banks today, and there are regulatory lessons to be learned 

from the only global systemically important bank (G-SIB) failure 

since the Dodd-Frank Act, which was not in the U.S., but was 

Credit Suisse. 

Forums like the Financial Stability Board (FSB) and the Basel 

Committee on Banking Supervision (BCBS) allow us to advance 

our national interests and leverage the influence of the United 

States in the development of international standards. The argument that our regulators, by participating in these international organizations, are somehow ceding their authority to the international community is misguided. U.S. regulators have no obligation to adopt the standards developed by these organizations, and 

any regulatory proposal informed by their participation must adhere to the same legal and procedural requirements as any other 

proposal by U.S. regulators. 

Chairman MCHENRY. The gentleman’s time has expired. 

Mr. FOSTER. Thank you, and I yield back. 

Chairman MCHENRY. Today, we welcome the testimony of Dr. 

Michael Gibson, Director of Supervision and Regulation at the 

Board of Governors of the Federal Reserve System; Mr. Ryan 

Billingsley, Deputy Director of Capital Markets and Accounting 

Policy at the Division of Risk Management Supervision at the Federal Deposit Insurance Corporation; and Ms. Grovetta Gardineer, 

Senior Deputy Comptroller for Bank Supervision Policy at the Office of the Comptroller of the Currency. We thank each of you for 

being here. We will recognize you each for 5 minutes for an oral 
5 

presentation of your testimony. And without objection, each of your 

written statements will be made a part of the record. 

And we will begin with you, Mr. Gibson. 

STATEMENT OF MICHAEL S. GIBSON, DIRECTOR, SUPERVISION AND REGULATION, BOARD OF GOVERNORS OF THE 

FEDERAL RESERVE SYSTEM (FED) 

Mr. GIBSON. Chairman McHenry, Ranking Member Waters, and 

members of the committee, thank you for the opportunity to discuss the Federal Reserve Board’s engagement with international 

organizations on supervisory and regulatory matters. 

The Board participates in various international forums in support of its statutory responsibilities of supervising and regulating 

financial institutions and fostering financial stability. In a globallyinterconnected financial system, financial shocks can quickly propagate across national borders, and the Board seeks to promote the 

stability of the U.S. financial system by supporting strong and consistent minimum regulatory standards and sound supervisory practices for financial institutions globally. 

Engagement with international organizations also has been an 

effective and efficient means for understanding and sharing information on global financial risks, as well as an opportunity for the 

Board to help shape international standards and recommendations 

to the nature and needs of the U.S. financial system. It is also important to note that the standards and recommendations are not 

binding on any jurisdiction or member, including the United States 

and the Federal Reserve. Any changes to the regulations that apply 

to U.S. firms would be proposed by the Federal Reserve and go 

through our usual public notice-and-comment process. 

In support of its goal to enhance the strength, stability, and resilience of the financial system, the Board actively participates in the 

Basel Committee on Banking Supervision, the Financial Stability 

Board, and the International Association of Insurance Supervisors 

(IAIS). The Board is also a member of the Network for Greening 

the Financial System (NGFS). Although the NGFS is not a standard-setting body, Board staff participate in its working groups to 

understand how other central banks are approaching climate-related financial risks. 

Each international group that we participate in has a unique organizational structure and purpose and holds regular meetings. 

The nature of the Board’s participation varies accordingly by group. 

The Board promotes U.S. interests by participating in the main 

groups and subgroups and has leadership roles on major issues. As 

part of this work, we coordinate with other U.S. participants, such 

as the FDIC, the OCC, the SEC, Treasury, the Federal Insurance 

Office (FIO), and State Insurance Commissioners. These international groups are consensus-driven organizations. Participants 

seek to reach a common understanding around material issues and 

consider what policy choices could help to address those issues. 

Although it can be challenging to work through complex issues, 

this approach serves as a check on potentially undesirable policy 

recommendations. As with any other process, alternative viewpoints emerge and dissenting opinions are voiced. Before standards 
6 

or recommendations are finalized, they are often subject to public 

consultation and the comments inform any final decisions. 

Staff from the Board engaged in these groups consult regularly 

with Board principles to ensure any final recommendations or 

standards align with the Board’s policy goals. Once standards or 

recommendations are finalized, it is then up to individual members 

to implement any changes as appropriate in their respective jurisdictions. While the Board participates in these organizations, it is 

under no obligation to adopt any standards or recommendations 

that are developed. When the Board makes decisions about policy, 

it does so on the basis of its own domestic statutory mandates and 

responsibilities and in accordance with U.S. administrative law, 

importantly, including an opportunity for public comment on the 

proposal. The Board does not implement standards or recommendations that are beyond the scope of our mandate or are otherwise 

not appropriate for our banks and our financial system. 

The Board is committed to transparency in its own work and 

supports transparency by the international organizations in which 

it participates. These international organizations publish information to keep the public informed of their work. The Board supports 

efforts by international organizations to regularly publish information, including annual work plans and meeting summaries, and to 

subject work products, such as proposed international standards 

and supervisory principles, to public comment. Congressional oversight is an important feature of the U.S. regulatory framework. 

Congress has an oversight role for the Board’s activities, including 

its participation in international organizations, and we welcome 

that oversight. 

Thank you, and I am happy to answer any questions you may 

have. 

[The prepared statement of Director Gibson can be found on page 

64 of the appendix.] 

Chairman MCHENRY. Thank you. Mr. Billingsley, you are now 

recognized. 

STATEMENT OF RYAN BILLINGSLEY, DEPUTY DIRECTOR, CAPITAL MARKETS & ACCOUNTING POLICY, DIVISION OF RISK 

MANAGEMENT SUPERVISION, FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) 

Mr. BILLINGSLEY. Chairman McHenry, Ranking Member Waters, 

and members of the committee, I am pleased to appear at today’s 

hearing to discuss the FDIC’s engagement with international organizations. The FDIC’s core mission is to maintain stability and 

public competence in the U.S. financial system. The FDIC carries 

out this mission through its responsibilities for deposit insurance, 

banking supervision, and the orderly resolution of failed banks. 

The FDIC’s international engagement is guided by the same mission. 

My testimony today will discuss the FDIC’s engagement with 

international organizations, including the Financial Stability Board 

(FSB), the Basel Committee on Banking Supervision (BCBS), the 

Network for Greening the Financial System (NGFS), and the International Association of Deposit Insurers (IADI). 
7 

The Financial Stability Board, or FSB, was established to improve international coordination and promote effective regulatory, 

supervisory, and other financial sector policies. While the FDIC is 

not a member of the FSB plenary, the FDIC is a member of the 

Resolution Steering Group (ReSG). As a member of the ReSG, the 

FDIC has helped to develop international standards and guidance 

on the resolution of global systemically important financial institutions (G-SIFIs). Our contributions in this area have enabled the 

U.S. resolution regime to serve as a model for effective resolution 

regimes in other jurisdictions. 

The Basel Committee on Banking Supervision, or BCBS, is an 

international standard setter for the prudential regulation of banks 

and provides a forum for regular cooperation on banking supervisory matters. The FDIC engages the BCBS in support of its mission, and the BCBS aims to improve consistency of standards internationally. Through their work at the BCBS, the FDIC and the 

other Federal banking agencies have sought to strengthen the stability and resiliency of the banking sector, both domestically and 

abroad. 

The Network for Greening the Financial System, or NGFS, is a 

forum for collaboration and information-sharing among central 

banks and banking supervisors. Importantly, the NGFS is not a 

standard-setting body. The FDIC engages with members of NGFS 

to foster collaboration and share best practices in addressing climate-related financial risks. 

The International Association of Deposit Insurers, or IADI, is a 

forum for deposit insurers from around the world to gather and 

share knowledge and expertise. Its mission is to contribute to the 

enhancement of deposit insurance effectiveness by promoting guidance and international cooperation. As a member of IADI, the 

FDIC has supported the development of standards and best practices for depositor insurers around the world. The FDIC’s work at 

IADI contributes to the stability of the global financial system by 

promoting international cooperation in the field of deposit insurance. 

To reiterate, the FDIC engages in international organizations in 

support of maintaining effective deposit insurance, bank supervision, and resolution systems. It is important to note that standards developed by these organizations do not have legal force. The 

implementation of any standard in the United States remains subject to the U.S. notice-and-comment rulemaking process, and the 

FDIC may elect to consider different standards that more appropriately reflect the specific characteristics of U.S. markets. 

I would like to close by saying that it is a privilege to work 

alongside so many talented people at the FDIC. They dedicate their 

careers to serving the public and the FDIC’s mission, and I want 

to acknowledge and thank them all for all that they do. Thank you. 

I look forward to your questions. 

[The prepared statement of Deputy Director Billingsley can be 

found on page 48 of the appendix.] 

Chairman MCHENRY. Ms. Gardineer, you are now recognized. 
8 

STATEMENT OF GROVETTA N. GARDINEER, SENIOR DEPUTY 

COMPTROLLER FOR BANK SUPERVISION POLICY, OFFICE 

OF THE COMPTROLLER OF THE CURRENCY (OCC) 

Ms. GARDINEER. Chairman McHenry, Ranking Member Waters, 

and members of the committee, I am pleased to testify before the 

committee to discuss the OCC’s engagements with the international forums to advance the agency’s mission to ensure that national banks and Federal savings associations operate in a safe and 

sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations. I 

oversee several of the agency’s policy units, including those that 

participate in issues related to international banking. 

My written statement discusses the OCC’s participation in international forums and the benefits this provides to the U.S. banking 

system. The OCC supervises several banks and U.S. affiliates of 

foreign banks that conduct business on a global scale. It is critical 

in our role as a prudential supervisor to understand the full scope 

that these global operations present so that we can assess the effectiveness of the bank’s risk management policies and programs. 

Engaging with foreign counterparts is critical to achieving that 

understanding. International forums present an opportunity for 

regulators and supervisors to share knowledge and discuss common 

approaches, practices, and policies while fulfilling their individual 

supervisory mandates, and ultimately supporting the integrity of 

global financial markets. 

The OCC is a member of several international forums or their 

subgroups, including the Basel Committee on Banking Supervision, 

the Financial Stability Board, the Financial Action Task Force 

(FATF), and the Network for Greening the Financial System. The 

OCC’s engagement in international forums is beneficial to the 

agency and the U.S. banking system. 

For example, our participation provides an opportunity to exercise U.S. leadership and promote U.S. policy interests by helping 

shape standards that may be adopted by jurisdictions around the 

world. Our participation helps establish a level playing field for 

global banking activities. This minimizes the possibility that another country’s lax regulatory regime could give its banks a competitive cost advantage over U.S. banks or promote a race to the 

bottom by jurisdictions. 

Our membership also advances U.S. national security and foreign policy interests. For example, the OCC’s participation in the 

FATF allows the agency to exert significant influence on the development, revision, and implementation of the FATF’s Anti-Money 

Laundering/Combating the Financing of Terrorism (AML/CFT) 

framework to strengthen regimes worldwide. This reduces the exposure of U.S. banks to money laundering and terrorist financing 

risks, thus preserving the integrity of the U.S. financial system and 

supporting the achievement of national security goals. 

In addition, OCC’s engagement in international forums supports 

the development of more-consistent global frameworks, which 

makes it easier for internationally-active U.S. banks to understand 

what to expect in other operating environments. It also provides a 

venue for sharing supervisory and regulatory principles, practices, 

and perspectives. This can be especially helpful in educating mem-
9 

bers about developing issues and innovative topics, such as crypto 

assets, tokenization, generative artificial intelligence, and other developing technologies, particularly since these products and technologies do not recognize international borders. 

As a U.S. Federal regulator, the OCC maintains its independence. While international consistency is valuable, the OCC’s priority is the safety, soundness, and fairness of the U.S. financial 

system. Any standards developed by the international forums in 

which the OCC participates inform OCC rulemakings, but are not 

otherwise applicable to federally-supervised banks without further 

action. 

In conclusion, the OCC participates in international forums to 

further U.S. interests, gain a better understanding of global developments in the financial industry to move the international regulatory framework toward more consistently high and appropriate 

standards, and strengthen our relationships with foreign counterparts. Thank you, and I look forward to answering your questions. 

[The prepared statement of Senior Deputy Comptroller 

Gardineer can be found on page 56 of the appendix.] 

Chairman MCHENRY. Thank you all for your testimony. I will 

now recognize myself for 5 minutes for questions. 

I will begin with you, Mr. Gibson, on behalf of the Federal Reserve. The Basel Committee’s charter requires a public consultation 

process for all Basel standards. Yet, in May 2022, the Basel Committee, without public consultation, altered the G-SIB surcharge 

for the largest banks, but specifically for European Union banks. 

The net result was for European G-SIBs, European large banks, 

there was a 50-basis-point reduction in their capital surcharge. Are 

you aware of this? 

Mr. GIBSON. Yes. 

Chairman MCHENRY. Okay. At the time, there were several critics of the secretive change to the G-SIB framework, including the 

progressive group, Better Markets, who described the Basel Committee as shamefully lowering capital requirements for European 

banks without public input. Does the Federal Reserve believe that 

there is public input in that process? 

Mr. GIBSON. You are asking if the Basel Committee put that 

change out for public comment? I don’t know. I don’t remember. 

Chairman MCHENRY. You don’t remember? Okay. 

Mr. GIBSON. On that particular change, I can check and get back 

to you. 

Chairman MCHENRY. So, there is a most significant change in 

capital surcharges until the next set of negotiations at the Basel 

Committee, which resulted in much higher capital surcharges for 

U.S. banks, which is now going through the Federal Reserve process and all of the regulators for this additional Michael Barr approach to new capital standards. How does the Federal Reserve 

reconcile relaxing European large bank capital surcharges, and yet, 

in the next negotiation, increasing U.S. capital surcharges on our 

U.S. domestic banks? 

Mr. GIBSON. With respect to the G-SIB surcharge, it was one of 

the post-2008 financial crisis—— 
10 

Chairman MCHENRY. No, no, this was 2022, a decade after the 

financial crisis. Let’s not misstate this. That is what I am asking 

you about, 2022, and then, last year. 

Mr. GIBSON. In the U.S., we, the Federal Reserve, have proposed 

some modifications to the G-SIB surcharge. 

Chairman MCHENRY. I am aware of that. I am asking you about 

the Basel Committee and the name of this committee hearing on 

the international coordination. The justification from the Vice 

Chair of the Fed was that we have to implement the Basel standards. That is the justification, so that is why I am asking about 

this international coordination. 

Mr. GIBSON. We do coordinate at the Basel Committee on common approaches to things like the G-SIB surcharge, but we implement them domestically according to our rulemaking process. 

Chairman MCHENRY. Okay. I understand that, but you then negotiate those standards internationally and have agreement internationally. That is what the Basel Committee does. Is that correct? 

Mr. GIBSON. Yes. 

Chairman MCHENRY. This is what I am trying to highlight for 

Members here. Who attends these Basel Committee meetings on 

behalf of the Federal Reserve? Do you have a designated staff? 

Mr. GIBSON. I attend the Basel Committee meetings, and Chair 

Powell and Vice Chair Barr attend the oversight body of governors 

and heads of supervision. 

Chairman MCHENRY. Was there a vote on this question of the 

European Union G-SIB surcharge, the reduction in capital standards? Was there a vote at the Basel Committee on that? 

Mr. GIBSON. The decisions aren’t voted on; they are by consensus. 

Chairman MCHENRY. By consensus. So, you put out reports, but 

we don’t know relative opinions, the Federal Reserve’s view, the 

FDIC’s view, the OCC’s view; what we get is just the result in 

these disclosures? I am asking what U.S. nationals are doing on behalf of implementing financial policy and the opinions going in and 

the results coming out, which we don’t have disclosures on. 

Mr. GIBSON. In the example that you are citing of the discussions 

in the Basel Committee around the changes to the G-SIB surcharge, the way we would handle that is that I would brief Vice 

Chair Barr about what the discussions are at the Basel Committee. 

And nothing that is done in the Basel Committee is binding on us, 

but we do want to give good input and we would give our input into 

those discussions. 

Chairman MCHENRY. Okay. This is the basic question for all regulators. We send the U.S. Trade Representative out internationally. We know who is negotiating for us. There are disclosures back 

to Congress on implementing trade laws. We have financial regulators that are implementing stuff that is even more impactful than 

trade negotiations, that have a direct bearing on domestic lending 

to small businesses and families and mortgages, and yet, we have 

no disclosures on it, we have no equivalent disclosures on it. That 

is the driving question here, and that is the reason why we are 

having this hearing. This is what I want to highlight. This one example with the Fed lowering European bank capital standards, and 

in the same breath, in the same committee internationally, raising 
11 

U.S. capital standards in the next set of meetings. And yet, we 

have no justification for this, nor the relative opinion of the Federal 

Reserve. 

With that, I will now recognize the ranking member, Ms. Waters, 

for 5 minutes. 

Ms. WATERS. Thank you, Mr. Chairman. Dr. Gibson, the Fed participates as a member of the Basel Committee, and that organization came to an agreement in 2017 with respect to the Basel III 

Endgame proposal to strengthen bank capital requirements. And 

while Republicans like to bash international agreements, even 

former Secretary Steven Mnuchin applauded the 2017 agreement, 

saying, ‘‘The reforms would standardize the approach to capital 

regulation, improve the quality and consistency of bank capital requirements, and level the playing field for U.S. banks.’’ 

Recently, Treasury Secretary Yellen highlighted the importance 

of getting these rules implemented when she testified on FSOC’s 

annual report. Unfortunately, it took our regulators more than 6 

years to issue a proposal to implement the 2017 Endgame reforms, 

which the Fed and other banking regulators finally did last year. 

That is because Trump’s other appointees decided to prioritize deregulating regional banks, including allowing large banks like SVB 

to opt out of capital requirements related to their securities portfolio that had large unrealized losses. 

Dr. Gibson, can you confirm that in the Fed’s report on the failure of Silicon Valley Bank, you found that the bank appeared better capitalized by nearly 2 percent because of this opt-out for Accumulated Other Comprehensive Income (AOCI)? 

Mr. GIBSON. We only apply that AOCI passthrough to the largest 

banks, and it was not applied to Silicon Valley Bank. That is correct. 

Ms. WATERS. Thank you. Would you confirm that the Basel III 

Endgame rule will fix this loophole and ensure that other large 

banks are being capitalized? 

Mr. GIBSON. That was what the agencies proposed last year. It 

is out for comment, and we received comments on that provision, 

so we are reviewing the comments. 

Ms. WATERS. Thank you. I know your agencies are getting a lot 

of pushback from the banks and are looking at making changes, 

but this rule is absolutely critical to preventing a future failure and 

protecting consumers across the country, so I urge your agencies to 

finalize the rule this year. 

Ms. Gardineer, I appreciate you sharing OCC’s work on international bodies where you can collaborate and learn from what 

other countries are doing. However, it seems like the United States 

is behind the curve in addressing climate-related risks compared to 

other countries. For example, regulators in the United Kingdom included climate change in their insurance and stress testing 4 years 

ago, and the Bank of England designed their 2021 stress test to aid 

their economy’s transition to net zero and to analyze climate-related risk on capital requirements. What is your agency learning 

from foreign regulators that you seek to update requirements to ensure our banks are absolutely and adequately considering and addressing climate-related financial risks? 
12 

Ms. GARDINEER. Thank you for the question, Ranking Member 

Waters. In our engagement with the NGFS as well as the Basel 

Committee, we are learning and sharing knowledge about what 

their experience has been in implementing their rules and their engagement. What we have done here at the OCC is, starting in 

2022, the OCC began reviewing information on our largest institutions by doing a range of practice reviews based on some of the 

things that we have learned from our international engagement. 

While we are doing that, we also acknowledge that many of the 

largest banks—and that has been the focus of our engagement and 

our work—have started to do climate-related financial risk activities of their own initiative. So understanding what the experience 

has been on an international basis helps us to frame our approach 

going forward. 

Ms. WATERS. Thank you. What is your agency learning from foreign regulators as you seek to update requirements to ensure our 

banks are adequately considering and addressing climate-related financial risk? 

Ms. GARDINEER. We are looking at and learning about how they 

are doing their risk management, what they are doing with regard 

to transition risks, what they are doing with regard to physical 

risks. Those issues actually are very important to our risk management approach as we consider how we will implement that here at 

the OCC. 

Ms. WATERS. Thank you very much, and I yield back the balance 

of my time. 

Chairman MCHENRY. The gentleman from Arkansas, the Vice 

Chair of the committee, Mr. Hill, is now recognized for 5 minutes. 

Mr. HILL. Thank you, Mr. Chairman. And thanks to our panel 

for being with us today. Thanks for your contributions to this discussion, because it is so important that when we think about American leadership, we think about that across-the-board, including in 

harmonizing regulations around the world. But this is a tough 

time, I think, in the U.S., because we have a group of people in our 

country who think that Europe has all the solutions to so many 

issues, whether we are talking about privacy on GDPR, investment 

research or investment standards, artificial intelligence, and, of 

course, a topic today, the Basel III standards on setting global capital standards. 

During my time at the Treasury and as a White House official, 

it was the real mission of our regulatory agencies and our policy 

leaders to be sure that our government would defend our ability to 

have the regulatory system that we want, that we think is proper 

for our companies in a Federal republic for competitiveness purposes. 

Sure, we are going to go to these meetings, and we are going to 

listen to all of this stuff, and we are big picture for harmonization, 

but we are really big picture for America’s competitive position. 

And we wouldn’t agree to anything, even if it was harmonious, that 

we thought would put us in an anticompetitive position for our capital markets, for our financial conditions here. But I don’t see that 

consistently as a policy position in the Biden Administration at all, 

and U.S. financial regulation seems to be, as I say, being subsumed 

by European ideas, which I don’t think are in the right direction. 
13 

Last week, the SEC published their climate disclosure rule for 

public companies, and that is the most recent example of a bad 

idea inboarded from across the Atlantic. In today’s hearing, you are 

going to hear us talk about pervasive ways that this is shaping regulations here at home, including this incorporation of climate activism into our Federal prudential supervisory framework. 

Following up on Chairman McHenry’s line of questioning, let’s 

talk about theBasel Endgame. The U.S. clearly has a higher surcharge for G-SIB banks than those in Europe. Our stress capital 

buffer is based on supervisory stress tests, among other things, 

which are all more strict than in Europe. Would you agree with 

that, Dr. Gibson? 

Mr. GIBSON. On both of those matters? Yes, I would agree. 

Mr. HILL. It seems to me when I look at the 800-plus-page proposal from Basel III, and that is why I think there were so many 

negative comments that we already have a strict Basel III level or 

above-capital standard, and it exceeds that in Europe. And I think 

a lot of people feel like some of this is redundant. The ranking 

member talked about Steve Mnuchin, our former Treasury Secretary, talking about his hope—his statement was a hope that the 

reform would standardize the approach, and improve the quality 

and consistency of bank capital, and that that would help level the 

playing field for U.S. banks. I find it to be just the opposite. How 

many people wrote to you in support of Basel III in the rulemaking, Dr. Gibson? What percentage of the comments were positive? 

Mr. GIBSON. Most of the comments were negative, not positive. 

Mr. HILL. And were some of those comments about level playing 

field U.S. banks for the big banks? 

Mr. GIBSON. We got comments about that. 

Mr. HILL. Yes, and I bet a lot of them felt like, God, this is making it worse, not better. Would that be generally true based on 

what you read from the comments? 

Mr. GIBSON. We got comments in both directions, but most of the 

comments were negative. 

Mr. HILL. Yes. I think it doubled down on gold-plating and puts 

the U.S. absolutely at a disadvantage with international banks at 

the top, and it is inconsistent, including with what is going on in 

the U.K., Japan, and Canada. Let me ask you this: Did you participate in writing the memorandum that we received last May about 

the look back at the Silicon Valley Bank supervisory process? 

Mr. GIBSON. We had staff who—— 

Mr. HILL. But you reviewed it, did you not? 

Mr. GIBSON. Yes. 

Mr. HILL. Because that is an important document, and Vice 

Chair Barr was great at being so responsive to the committee. In 

your view, what was the top issue, the two mistakes that Silicon 

Valley Bank made? 

Mr. GIBSON. They didn’t manage their interest rate risk or liquidity risk well. 

Mr. HILL. Right, and neither one of those is dependent on capital. I think the issue here is that supervisors failed, their management failed, and customers were not attentive, and to try to con-
14 

nect Silicon Valley Bank to whether we should or should not adopt 

Basel III Endgame is a false canard. I yield back. 

Chairman MCHENRY. The gentleman from California, Mr. Sherman, is now recognized for 5 minutes. 

Mr. SHERMAN. It seems odd that those who oppose this improvement in our regulations are listing xenophobia, when in fact, what 

you folks are doing goes far beyond the European standards, as the 

gentleman from Arkansas pointed out. I don’t know whether the 

standards you are adopting are too high, but I do know that if they 

are, we shouldn’t be blaming the Europeans, because their standards are not too high. We are told that we should ignore climate, 

but I don’t see anybody on this committee investing in the sovereign debt of the Maldives—it is predicted that the Maldives will 

be an entirely submerged nation by the end of this century. I won’t 

even ask the question of our bank regulators here, but I would 

think that if all of a bank’s assets were divested in the Maldives, 

you would notice that subaquatic countries usually can’t pay their 

debt. 

What concerns me here is that we are going to make some mistakes in how we adopt these regulations, and I don’t think we 

should blame the Europeans for that. The first of these is, it is my 

understanding that these proposed regulations give no weight to 

private mortgage insurance (PMI). Is that true, and are you going 

to fix it? I will ask our first witness. 

Mr. GIBSON. We have gotten comments on the issue of mortgages, generally, and private mortgage insurance, in particular. 

The proposal doesn’t change the treatment of private mortgage insurance. It is recognized in a particular way in the current capital 

rules, and that is not proposed to change in the proposed rules. We 

have gotten a lot of comments on that. 

Mr. SHERMAN. You are not changing risk weights on loan-tovalue ratios that ignore the effect of private mortgage insurance? 

Mr. GIBSON. The proposal would change the risk weights to make 

them risk-sensitive. 

Mr. SHERMAN. And changing those risk weights, you would have 

the same rate for mortgages or the same loan-to-value ratio whether there was mortgage insurance or there wasn’t mortgage insurance. Is that correct? 

Mr. GIBSON. Not necessarily. 

Mr. SHERMAN. That is what everybody in the industry is saying. 

Do any of our witnesses want to assure me that private mortgage 

insurance is going to be reflected in the risk the bank has taken? 

Mr. BILLINGSLEY. Certainly, we can’t make that assurance, but 

like Mike said, I think that is an area where we get a lot of comment from the industry for sure. 

Mr. SHERMAN. Okay. Now, under the proposed rules you are 

doing, you are appropriately treating tax credits owned by banks 

for low-income housing, but you are treating much worse tax credits for clean energy. Is that something that I can count on you to 

clean up? I will ask the witness at the far end. 

Ms. GARDINEER. Congressman Sherman, I think we have gotten 

a lot of comments about that, and we are thoroughly reviewing 

those comments and the process is moving forward. And we will 

address those in any final product that we issue. 
15 

Mr. SHERMAN. Okay. Now, in a capitalist society, the allocation 

of capital is critical, and it is often a fight between Wall Street and 

my local pizzeria, my local Main Street business. And throughout 

this process, you have tilted things toward Wall Street and against 

Main Street. 

First, you have a rule of only 65 percent waiting for a company 

that happens to be publicly traded, whereas a company of equivalent risk is 100 percent. 

Second, you do not mark to market long-term bonds held if the 

bank just says that they are going to hold them to maturity. 

Finally, on that 65-percent rule, not only do you hit small and 

medium-sized businesses, but also mutual funds and pension plans. 

Can I be assured that when these rules actually come out, that 

small businesses, mutual funds, and pension plans will not be discriminated against as compared to publicly-traded corporations? 

Mr. Billingsley? 

Mr. BILLINGSLEY. Again, I can’t provide you the assurance you 

are asking for, but the issue you raised about the corporate risk 

weight is a really important one. 

Mr. SHERMAN. I want to get in one more thing. You guys are obviously getting a lot of input, including in this room. Can I be assured that you are getting more input from Americans than Europeans in writing these rules? I will ask each witness. More from 

Europeans or more from Americans in terms of total input? 

Mr. GIBSON. More of the comments are from Americans. 

Mr. SHERMAN. And more of the committee hearings—— 

Mr. GIBSON. Likewise. 

Mr. SHERMAN. ——and meetings. Is that correct? And I will ask 

our third regulator. 

Ms. GARDINEER. Yes. 

Mr. SHERMAN. Okay. So if you guys screw it up, don’t blame the 

Europeans, and if you oppose these rules, don’t enlist as xenophobia. I yield back. 

Chairman MCHENRY. The gentleman’s time has expired. The 

gentleman from Oklahoma, Mr. Lucas, is now recognized for 5 minutes. 

Mr. LUCAS. Thank you, Mr. Chairman. The Basel Committee on 

Banking Supervision is the primary global standard-setter for prudential regulation of banks, and of course, the Fed, the FDIC, and 

the OCC are all members. And as we have heard today, there is 

significant concern about the lack of transparency in the Basel 

Committee’s internal proceedings, which your agencies are party 

to. 

Director Gibson, are you aware if the Basel Committee deliberations regarding capital standards are public in any way or if any 

of the proceedings are even public-facing? 

Mr. GIBSON. Yes. The Basel Committee puts out those standards 

for public comment and takes account of the comments when they 

finalize the standards. 

Mr. LUCAS. But are the deliberations public, like the minutes 

from other Federal agencies? 

Mr. GIBSON. They publish summaries of the meetings and they 

publish their documents. 
16 

Mr. LUCAS. Do we know that decisions by the Basel Committee 

on Banking Supervision are taken by consensus among the members? 

Director Gibson, why not just have each jurisdiction vote and 

have majority rule? Could you articulate about why consensus 

building is important? 

Mr. GIBSON. The Basel Committee operates by consensus because 

nothing it does is binding on any country. So if countries are going 

to agree to something in the Basel Committee, they still have to 

implement it through their domestic process and with their domestic statutory responsibilities. The consensus at the Basel Committee helps make sure that things that countries are discussing 

in Basel are going to be consistent with our domestic statutory 

mandates. 

Mr. LUCAS. So, consensus is key. Is using this model the only 

way to promote a lasting and resilient capital framework? 

Mr. GIBSON. In the Basel Committee, there are no binding agreements possible, so there are no votes, and there is really no other 

way the Basel Committee can have those discussions other than 

operating by consensus. It is different from legally-founded organizations. 

Mr. LUCAS. Maybe the Fed should use the same kind of system. 

That said, thinking about my colleague, Mr. Hill’s, observations, 

you are all aware of the significant concern that the Basel 

Endgame proposal from your agencies will disadvantage U.S. 

banks on multiple fronts. There has been much discussion about 

that here. The proposal goes far beyond the capital requirements 

that banks and other jurisdictions are subject to, like the EU. 

Director Gibson, when revisiting capital standards, to what extent does the Fed consider the implication of Basel standards by 

our international counterparts, the nature of the playing field? 

Mr. GIBSON. We definitely look at the competitive landscape. Yes, 

we look at that. 

Mr. LUCAS. Okay. The charter for the Basel Committee requires 

that each member commit to implementing the committee’s decisions. From my understanding, the Basel Committee assesses the 

timeliness and the completeness of domestic regulations. However, 

of course, in the United States, we have a process that, in theory, 

should inform the making of rules. 

Director Gibson, focusing on Basel III Endgame proposal, I am 

concerned that there could be an unwillingness by the Fed to deviate too far from the Basel capital standards, given the Fed is already committed to implementation. So, how much weight does the 

Fed give to these past commitments as a member of the Basel 

Committee during the Fed’s rulemaking process? 

Mr. GIBSON. The Fed’s rulemaking process is going to be focused 

on what is the best rule to implement our domestic statutory mandate. 

Mr. LUCAS. As long as it is not contrary to the commitments we 

have given to the other entities. Okay. I will note that in Europe, 

implementation of the Basel Committee standards is done through 

the legislative process, through their parliament. In the United 

States, the Basel standards are solely left up to banking regulators. 
17 

That makes the revision period after comment intake even more 

important, and it is the sole opportunity for the public to be heard. 

One last thought: The Basel Committee comprises 45 members 

consisting of central bank regulators from 20 jurisdictions, including your agencies, and the central banks of Japan, Indonesia, Mexico, and around the world. 

Director Gibson, in the internal Basel meetings, does equal 

weight apply to each member? Whether you are a big economy or 

a small economy, does equal weight apply to each member’s consensus-building process? 

Mr. GIBSON. It is a consensus-driven organization, but certainly 

the U.S. has a big role, because we are the world’s largest economy. 

Mr. LUCAS. Ironically, Mr. Chairman, only a handful of countries 

have significant banks. With that, I yield back. 

Mr. HILL. [presiding]. The gentleman yields back. The gentleman 

from Georgia, Mr. Scott, is recognized for 5 minutes. 

Mr. SCOTT. Thank you, Chairman Hill. Director Gibson, here is 

the situation as I understand it. Under Basel, different jurisdictions are given national discretion to increase or decrease certain 

components of the regulatory framework based upon their own 

needs. Is that correct? 

Mr. GIBSON. Yes, that is correct. 

Mr. SCOTT. The significant increase in U.S. capital requirements 

related to banks’ trading activities has so far differed from the approach taken elsewhere around the world, is that correct? Let me 

get to the example here. The United Kingdom and Europe reforms 

are expected to result in roughly 3-percent and 10-percent increases in aggregate capital levels across their banking sectors. Is 

that correct? 

Mr. GIBSON. That sounds about right. 

Mr. SCOTT. Okay. This is compared, however, to a nearly 30-percent increase in capital levels for the largest U.S. banks when including both the Basel Endgame proposal and the surcharge 

changes. Is that correct? 

Mr. GIBSON. The first numbers you quoted were for all banks. 

Mr. SCOTT. Yes. 

Mr. GIBSON. And now, you are quoting a different number. 

Mr. SCOTT. Yes, because my question is this: Why is there such 

a discrepancy between the European regulators and us here in the 

United States, our regulators, when the entire goal was to harmonize requirements? 

Mr. GIBSON. Those comparisons are definitely one of the areas 

where we have gottens comments on our rulemaking, so we are 

going to look at that through the comment process, certainly. 

Mr. SCOTT. And what is the path forward for this proposal in relation to capital rules, and also, what changes are you considering 

in response to the number of comments submitted by businesses 

and consumers who have raised concerns? 

Mr. GIBSON. We have gotten over 300 comments and we are reviewing all of them, and we will take all of those into account when 

we move forward with the final rule. 

Mr. SCOTT. Are you pretty much satisfied with what is going on 

here? Do you agree with the status of the situation as it is? Do you 

see any dangers? Because this is a pretty large differentiation be-
18 

tween the results and activities and directions that the European 

Union is going in and what we are going in. But we are all connected, and there is great interplay between both our situation 

here in the United States and Europe, but there is this huge differentiation. 

Mr. GIBSON. The Board will be making decisions going forward 

about capital based on what is good for achieving our domestic 

statutory mandates for a strong banking system and a strong economy. 

Mr. SCOTT. Now, let me ask you this about your path forward. 

For the proposal in relationship to capital rules, what changes are 

you considering in response to the number of comments submitted 

by businesses who have raised these concerns? 

Mr. GIBSON. We are considering all of the comments that were 

received. We are looking at all of them and analyzing them. 

Mr. SCOTT. Okay. That is fine. Thank you very much. 

Mr. HILL. The gentleman from Georgia yields back. The gentleman from Missouri, Mr. Luetkemeyer, is recognized for 5 minutes. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. I thank the witnesses for being here this morning. It is kind of an interesting discussion. Let me start by saying that the various global governance 

bodies, like the Basel Committee and the Network for Greening the 

Financial System, frequently engage in what they call stocktakes. 

This is where a global governance body looks at what is recommended and scans the world to see who is doing what the global 

governance body wants and who is not. Part of the stocktaking involves surveying and monitoring, sometimes physically on site at 

the FDIC or the Fed by global peers. 

As recently as 2017, Chinese and Russian supervisory and regulatory officials participated in reviewing U.S. laws, rules, and regulatory framework, sometimes here in the United States, to determine whether we were adhering to the so-called recommendations. 

This cannot happen. We have the strongest and most-liquid capital 

markets in the world. We have the strongest and most-dynamic 

banking system, which is the envy of the world. Why in the world 

do we want to open up our regulatory framework to be manipulated by nonbinding recommendations from hostile foreign governments? 

Deputy Director Billingsley, has the BCBS or NGFS, or both, 

sent any questionnaires or monitors over to the FDIC over the past 

5 years asking and probing the FDIC for adherence of the U.S. regulatory framework to the recommendations of the global governance body? 

Mr. BILLINGSLEY. Yes. The peer reviews you are asking about, 

we have definitely engaged in over the years, but I would note that 

the results of those things have no effect, no force. 

Mr. LUETKEMEYER. Why in the world are you letting them in? 

That is the question. What good could come out of that? 

Mr. BILLINGSLEY. The answer to that question is that I think we 

learn a lot from engaging and understanding how jurisdictions’ 

rules differ. 
19 

Mr. LUETKEMEYER. We are learning something from the Communist Chinese Party of China or the Russian banks? Are you kidding me? 

Mr. BILLINGSLEY. No, our involvement in the process more generally, is not specific to, I suppose, the question you are asking. 

Mr. LUETKEMEYER. Those two banks are the ones that came over. 

I just told you that. Are you learning anything from them? 

Mr. BILLINGSLEY. Not during the process you are talking about, 

no, but from our involvement more broadly and being able to look 

at other jurisdictions. 

Mr. LUETKEMEYER. Why are they even allowed to come in? 

Mr. BILLINGSLEY. At that time, they were both members of the 

Basel Committee. 

Mr. LUETKEMEYER. Mr. Gibson, same question. Why in the world 

did you let the Russians and the Chinese come in our country and 

look at our stuff and expect them to be able to be good guys about 

this? 

Mr. GIBSON. These reviews look at our laws and they look at our 

regulations, which are all public information. We share public bank 

data. And if we were to share any confidential data, we would 

anonymize it, so it wouldn’t be identified to any bank. 

Mr. LUETKEMEYER. Why even take the risk of allowing them in 

here if you say it is public information that they are looking at? 

Mr. GIBSON. We meet with the team that wants to look at our 

regulations. 

Mr. LUETKEMEYER. What are you learning from them? Anything? 

Mr. GIBSON. All Basel Committee members, we share information about—— 

Mr. LUETKEMEYER. You know exactly what I am talking about. 

I am talking about the Russians and the Chinese. What are you 

learning from them, because you are allowing them in? 

Mr. GIBSON. If they are reviewing our rules, then we are not 

learning. We are explaining how we have implemented things domestically. 

Mr. LUETKEMEYER. Okay. Have you performed a similar oversight like that on any other countries in the world? 

Mr. GIBSON. The Basel Committee does reviews of—— 

Mr. LUETKEMEYER. No, I am just asking, the United States Federal Reserve, the OCC, are you conducting those same kind of reviews anywhere else in the world, like the Chinese and Russians 

were doing to us? 

Mr. GIBSON. We have sent staff to join some of these review 

teams in the past, yes. 

Mr. LUETKEMEYER. Do you ever bring our rules and regulations 

to the Basel Committees? Instead of bringing their stuff here, do 

you ever take our stuff there? 

Mr. GIBSON. We do share what we do—— 

Mr. LUETKEMEYER. Do they ever implement our stuff? 

Mr. GIBSON. Sometimes. 

Mr. LUETKEMEYER. Give me an example. 

Mr. GIBSON. We recently proposed a change to our G-SIB surcharge formula to average the data over the year instead of having 

it be only measured at the end of the year. That is a proposal that 
20 

was out for comment, and the Basel Committee is now proposing 

the same thing subsequently. 

Mr. LUETKEMEYER. Ms. Gardineer, you made a comment a while 

ago about things that you have learned from these folks. What has 

the OCC learned from Russia or China? 

Ms. GARDINEER. Congressman Luetkemeyer, the OCC takes the 

national security of the United States very serious, and we—— 

Mr. LUETKEMEYER. Oh, that is enough. I am done. I don’t need 

platitudes. 

Here is another question for you: With regards to implementing 

these rules and regulations, I have had three foreign banks from 

Europe in my office in the last 2 weeks, and they laughed at me 

when I asked the question about Basel, because I said, what are 

you doing? Are you implementing these things? They said, no, we 

are not doing it because it makes us noncompetitive. 

Mr. HILL. The witness can answer that question in writing. 

Mr. LUETKEMEYER. Thank you very much. I yield back. 

Mr. HILL. The gentleman’s time has expired. I thank the gentleman from Missouri. The gentleman from Massachusetts, Mr. 

Lynch, is recognized for 5 minutes. 

Mr. LYNCH. Thank you, Mr. Chairman. Ms. Gardineer, just following up on that last line of questioning, through the FATF recommendations, we have the ability to project our anti-money laundering and terrorist financing standards on other countries. Is that 

right? 

Ms. GARDINEER. That is correct, sir. 

Mr. LYNCH. Yes. So if they don’t comply with anti-money laundering regimes that we have established, and anti-terrorist financing standards that we have projected on other countries, they can’t 

operate through our financial institutions. Is that correct? 

Ms. GARDINEER. Yes. We have opportunities to stop that type of 

transaction. 

Mr. LYNCH. Yes. I think there are 190 countries that are involved 

or are a signatory to FATF, so we make sure that those other countries, in order to do banking business with us, cannot have lower 

standards that would allow money laundering or allow terrorist financing? Is that correct? 

Ms. GARDINEER. Yes. Our engagement with the FATF allows us 

to have higher and more appropriate standards to guard against 

the race to the bottom or to introduce that type of risk to the 

United States. 

Mr. LYNCH. Right. And in most countries, through their banking 

system, they want to have a stamp of legitimacy, right? In order 

to attract capital, they want to show people that they are operating 

under standards that have integrity and that those depositors and 

businesses can rely upon. Is that correct? 

Ms. GARDINEER. Yes. It does allow the other countries to understand and have a sense of confidence in a strong regime from other 

jurisdictions. 

Mr. LYNCH. And there are penalties. I know that FATF on occasion will look, will instruct certain countries to get into line to raise 

their standards if they feel that the money laundering risk or the 

tendency of terrorist financing to occur in that country is out of 

compliance with international standards. Is that correct? 
21 

Ms. GARDINEER. Yes. They actually publish and make it quite 

public if there is a weakened standard in a jurisdiction. 

Mr. LYNCH. Okay. Thank you. I want to jump over to something 

else. The Financial Stability Board has recently reported that for 

shadow banking—these are financial companies that operate in 

quasi-banking businesses, but they are not regulated like banks— 

the financial assets held by those shadow banking institutions now 

stands at about $460 trillion, which is almost about half of all financial assets that are in existence around the globe. I know that 

the Basel Committee on Banking Supervision is examining the 

vulnerabilities in that shadow banking world, and this is a question for all three of you. Could you offer your thoughts on what we 

have learned from our collaboration with international financial 

regulatory organizations to ensure that this shadow banking system is not creating a regulatory blind spot and a latent risk to our 

traditional banking system? 

Ms. GARDINEER. I am happy to start. The nonbank financial institutions, I think, do pose similar risks to the United States and 

other countries around the globe. It is important for us to share our 

experiences in order to manage that risk and make sure that the 

risks do not trickle into the United States’ financial system. So I 

think sharing those experiences, looking at that acceleration of 

growth allows us to have some harmonization around how we treat 

these entities. 

Mr. LYNCH. Right. Mr. Gibson, would you like to add to that? 

Mr. GIBSON. Just to say that the Financial Stability Board has 

been focusing on that topic, and by producing the report that you 

cited, they have increased the transparency around the nonbank financial intermediation significantly. 

Mr. LYNCH. Thank you. Mr. Billingsley? 

Mr. BILLINGSLEY. I would just add that through the international 

coordination, we can learn more about how banks are connected to 

the nonbank finance system you mentioned and understand how 

we could get feedback from the banking system. 

Mr. LYNCH. Okay. My time has just about expired, Mr. Chairman, so I will yield back. 

Mr. BARR. [presiding]. The gentleman yields back. The gentleman from Michigan, Mr. Huizenga, is recognized for 5 minutes. 

Mr. HUIZENGA. Thank you, Mr. Chairman. I appreciate the opportunity. I am going to jump right into this, since I have a few 

topics that I would like to cover. Given the recent finalized rule by 

the SEC over the climate-related disclosures, I thought perhaps we 

could explore how decision-making internally has influenced decisions being made by American regulators. 

On November 29, 2023, the Basel Committee issued a paper on 

what they call a Pillar 3 disclosure framework for climate-related 

financial risks as part of its, ‘‘holistic approach to address climaterelated financial risks to the global banking system.’’ The Basel 

Committee said its work was to, ‘‘further its mandate to strengthen 

the regulation, supervision, and practices of banks worldwide with 

the purpose of enhancing financial stability and the potential design of such a climate framework.’’ It sounds like awesome work, 

but in that paper, the Basel Committee said it was exploring disclosure requirements that included bank deposits and risks posed 
22 

to banks if depositors and others, ‘‘are impacted by climate-related 

financial risks and may require drawdown of their deposits.’’ 

So, Deputy Director Billingsley, does the FDIC agree with the 

Basel Committee that it is important to consider imaginary climate-related bank runs as a possible source of financial instability? 

And if so, what is the reason and evidence for why we will see bank 

runs being caused by climate change? 

Mr. BILLINGSLEY. At the FDIC, we are really focused on the financial risks associated with climate change, so we are really focused on how climate-related financial risk could feed into the traditional banking risk. 

Mr. HUIZENGA. Okay. So That is my question. What is the reason 

and the evidence of why we would see bank runs being caused by 

climate change? 

Mr. BILLINGSLEY. The disclosure requirements you just cited, I 

don’t think necessarily get into the details of that, but I think it 

is important to note that the disclosures you are talking about, we 

got a lot of comments back on those. I think the comment period 

for the Basel Committee ended last week or the week before last, 

so I am expecting to have some good—— 

Mr. HUIZENGA. So, you need to review the comments before you 

are able to answer that? 

Mr. BILLINGSLEY. No. I just think the comments we received, 

particularly from U.S.-based entities, will be helpful. 

Mr. HUIZENGA. You must not leave your microphone on, but why 

aren’t you able to then answer my question? 

Mr. BILLINGSLEY. I’m sorry. Could you repeat the question? 

Mr. HUIZENGA. For the third time, what reason and evidence is 

there that you believe that there will be bank runs related to climate change? You gave me gobbledygook first. Then you told me, 

well, we are getting a bunch of comments and that will be helpful. 

I asked whether you could answer my question or not, and you 

asked me to repeat the question. 

Mr. BILLINGSLEY. I am not aware of a bank run—— 

Mr. HUIZENGA. Imagined scenario. 

Mr. BILLINGSLEY. I am not aware of a bank run at this time, to 

be honest. 

Mr. HUIZENGA. Okay. Well, it took three attempts, but thank 

you. In a Fed research paper authored by an official who serves as 

Co-Chair of the Basel Committee’s Task Force on Climate-related 

Financial Risks, an idea called, ‘‘double materiality,’’ was analyzed. 

The idea seems to be that bank supervisory authorities should consider both the risks that banks face from climate change themselves and any impacts of bank actions, such as to whom and 

where they lend on climate change. For example, if a perfectly legal 

and financially-healthy producer of a product that the Fed might 

think is a so-called, ‘‘brown sector,’’ got a loan from a bank, maybe 

the Fed would want the bank to view the loan as riskier because 

the Fed thinks that they are creating products that could potentially cause more wildfires or harsh storms or things like that in 

the future. Is that something with which the FDIC also agrees? 

Mr. BILLINGSLEY. No. The issue you raise about double materiality is not within our mandate. 
23 

Mr. HUIZENGA. Okay. Director Gibson, under the guise of safety 

and soundness, what would prevent the Fed in the future from 

using existing authorities to change bank supervision using concepts such as double materiality to channel credit away from what 

future Fed officials and the global governance crowd believe are 

brown sectors and toward what they believe to be green sectors? 

Mr. GIBSON. Our supervisory focus is only around safety and 

soundness. It is not around favoring one sector over another. 

Mr. HUIZENGA. That is not what your researchers are talking 

about. 

Mr. GIBSON. Research papers are not the official position of the 

Federal Reserve. Our researchers publish their research, but that 

is not an official position. 

Mr. HUIZENGA. Okay. The Federal Reserve’s Vice Chair for Supervision led a review of the Federal Reserve’s supervision and regulation of SVB and published the results along with his personal 

cover letter that included, in my view, some biased and unnecessarily-politicized views that are not representative of the full 

Board, I would hope. Shockingly, some of those views showed up 

word for word, yet without attribution to Vice Chair Barr’s report, 

in the Basel Committee on Banking Supervision’s October 2023 report entitled, ‘‘Report on the 2023 Banking Turmoil.’’ According to 

recent information provided to this committee from Fed Chair Powell, ‘‘The Federal Reserve staff contributed to and have opportunities to comment on various work products.’’ So, I will have to be 

following up with you on that, but I am very concerned about that 

interaction. 

With that, I yield back, Mr. Chairman. 

Mr. BARR. The gentleman’s time has expired. The gentleman 

from Texas, Mr. Green, is recognized. 

Mr. GREEN. Thank you, Mr. Chairman. And I thank the ranking 

member, and the witnesses for appearing. 

In my City of Houston, Texas, we had over a trillion gallons of 

water as a result of Hurricane Harvey in 2017. Over a 4-day period, 68 people died. It caused $125 billion in damages. Now, 

through a process known as security realization, banks bundle 

their loans and then indirectly issue them as securities. As climate 

change begins to impact these assets, these securities, such as 

mortgages, that are in these packages—doesn’t that cause some 

concern for banks when the insurance companies decide that they 

are moving out, they are not going to insure? We find that if you 

can’t get the insurance, you can’t get the home, because the home 

has to have some level of insurance. Does that cause some concern 

for banks or should it? 

Ms. GARDINEER. Congressman Green, of course, it does. We have 

a flood insurance rule, for example, that we have been dealing with 

for many years, and when we see changes like that, it does have 

an impact or the potential to have an impact on the financial institution that holds a mortgage. 

Mr. GREEN. Anyone else? 

Mr. BILLINGSLEY. No, I would agree. I think the issue you raise 

is how climate change can affect credit risk, and that is something 

we have been—— 
24 

Mr. GREEN. This is just one, but there are many others, and I 

think that is what we have to concern ourselves with, how this climate change impacts these mortgages, these underlying securities, 

and to the extent that they can impact the bank itself, and that 

is where you come in. Do you have any other examples? 

Mr. GIBSON. We do see banks looking at how climate-related financial risks affect their own loan portfolios or their business models, so banks are looking at those risks, yes. 

Mr. BILLINGSLEY. No, I would agree with Mike. It could also impact things like operational risk as well. 

Mr. GREEN. Say again? 

Mr. BILLINGSLEY. It could impact things like operational risk as 

well. 

Mr. GREEN. Operational risk? Okay. 

Ms. GARDINEER. Congressman, I do think that when we issued, 

jointly, Principles for Climate-Related Financial Risk, it is precisely 

because we wanted to focus on risk management because of the increased frequency of weather-related and extreme weather on operational risks, supervisory issues, and the true impact it has on 

communities and individuals across the country. 

Mr. GREEN. Okay. Understanding that we have these risks, what 

is it that you can do to assure us to some extent—you can’t guarantee—that banks will be in a position to deal with these risks that 

climate change will impose? What do you do? 

Mr. GIBSON. We make it clear to banks that we expect them to 

measure and manage all of their material risks, including the climate-related financial risks that you are talking about, and we 

have the interagency guidance that was mentioned that has some 

principles around that. 

Mr. GREEN. Do you also concern yourself with how well they are 

capitalized? 

Mr. GIBSON. There is no direct link from climate-related financial 

risks to capital requirements, but certainly, when banks are evaluating their own risks, they need to know whether their capital is 

sufficient for the risks they are taking, which would include all of 

their material risks. 

Mr. GREEN. But if the climate change impacts the underlying assets and the securities, does that not impact the financial market 

in some way? 

Mr. GIBSON. Yes, and we are seeing investors who purchase 

those securities, and they will be trying to understand their risks, 

which are very targeted to the risks that they are investing in. So, 

it is possible that climate-related financial risks could be important 

for a particular security, and we see investors paying attention to 

that. 

Mr. GREEN. Thank you very much. I yield back, Mr. Chairman. 

Thank you. 

Mr. BARR. The gentleman yields back. I now recognize myself for 

5 minutes. 

Director Gibson, the Basel Committee sets international capital 

and liquidity standards that the Fed uses as the basis for domestic 

regulations. Section 11(k) of the Federal Reserve Act, which you 

know very, very well, provides that, ‘‘The Board of Governors may 

not delegate its functions to a Federal Reserve Bank for the estab-
25 

lishment of policies for supervision and regulation,’’ but the Federal 

Reserve Bank of New York is a member of the Basel Committee, 

as is the Federal Reserve Board of Governors. 

How does the Federal Reserve reconcile delegating to the New 

York Fed the ability to be a member of the Basel Committee, which 

establishes supervision and regulation policies that become incorporated into Board regulatory and supervisory policies, with Section 11(k)of the Act, which says that the Board may not delegate 

to a Federal Reserve Bank its functions for the establishment of supervision and regulation policies? 

Mr. GIBSON. When the Board and the New York Fed participate 

in the Basel Committee, we are coordinating closely. We are not 

delegating anything, and we work together, and the Reserve Bank 

staff provide a lot of value. They have a lot of technical expertise. 

Mr. BARR. When you and the New York Fed are participating in 

the Basel Committee, do you represent the United States, or are 

you just participating in an international standard-setting exercise? 

Mr. GIBSON. We are representing our agencies, and we are representing the United States. 

Mr. BARR. And U.S. energy companies that are fossil energy, carbon-emitting companies, do you have their interests in mind when 

you are there in Basel? The shareholders of fossil energy, carbonemitting American companies, do you have their interests in mind? 

Mr. GIBSON. We have our statutory responsibilities around bank 

supervision and safety and soundness in mind. 

Mr. BARR. Yes, and when European standard-setters ask you to 

pressure banks to disinvest in or de-bank fossil energy companies, 

what do you say to them? 

Mr. GIBSON. I would say that we don’t direct banks to lend to 

any particular customer. That is the bank’s decision. 

Mr. BARR. And American shareholders who depend on the profitability of fossil energy companies, what do you say in defense of 

them when you are in the Basel Committee? 

Mr. GIBSON. Again, in the Basel Committee, we are representing 

our statutory responsibilities for bank supervision and safety and 

soundness. 

Mr. BARR. Do you ever raise the issue of energy reliability and 

energy affordability in the context of these conversations at Basel? 

Mr. GIBSON. That is not a main topic of the Basel Committee. We 

talk about—— 

Mr. BARR. You don’t talk about that? You don’t talk about the 

reliability of the American energy grid? You don’t talk about energy 

affordability or shareholder returns for American energy companies 

when you are there? 

Mr. GIBSON. That is not the focus of banks’ supervision and—— 

Mr. BARR. What is the focus? 

Mr. GIBSON. Banks’ safety and soundness, and a strong economy 

and a strong banking system. 

Mr. BARR. Yes, and are banks more sound when they don’t have 

good credit with energy companies? 

Mr. GIBSON. Banks need to manage their credit risk with respect 

to all of their borrowers. 

Mr. BARR. Yes. Director Gibson, in one of our subcommittee hearings last year, you said that you did not know about the funding 
26 

for the Network for Greening the Financial System (NGFS). Have 

you had a chance to look more closely at NGFS funding, and if so, 

whether you think that with activist funding of research, that the 

NGFS at the Federal Reserve Board is still comfortable with the 

Board’s participation in these NGFS meetings? 

Mr. GIBSON. I have looked more into the NGFS funding. What 

I can tell you is that the NGFS is supported by voluntary contributions of the NGFS members and observers. However, external 

funding can also be provided to support projects commissioned for 

the benefit of the NGFS. The NGFS charter states that such contributions do not confer the contributor any right to define the priorities or influence the NGFS’s work, and, of course, we do not contribute funding to the NGFS from the Federal Reserve. 

Mr. BARR. We are very obviously worried about the influence 

from who funds it. Director Gibson, can you describe the Climate 

Data Committee, including the Climate Data Hub, and the joint 

work with the Financial Stability Oversight Council’s (FSOC’s) Office of Financial Research’s Climate Data and Analytics Hub over 

at Treasury? It seems like there is a lot of obsession with climate 

at the Fed. 

Mr. GIBSON. I can’t speak for the FSOC or the Treasury, but in 

terms of the Federal Reserve, we do have a staff group that is looking at climate data and what might be investments—— 

Mr. BARR. My time has expired, but we need patriotism. From 

our participation in international bodies, we need promotion of 

American energy dominance. We don’t need yielding to European 

climate obsession. I yield back. 

The gentleman from California, Mr. Vargas, is recognized. 

Mr. VARGAS. Thank you very much, Mr. Chairman. Nice speech, 

but I would say what we really need to take a look at is the soundness of banks. That is what we are talking about here today, and 

I think banks are much more sound when they don’t put their head 

in the sand, and take a look at what is happening nationally and 

internationally. There is climate change. Even the Republican witnesses who come up here, when I ask, do you believe in climate 

change, even they raise their hands. When I first got here, none 

of them would. Now, they do. Of course, it is happening. How could 

you possibly predict a run on the bank with climate change? 

You know what? If you have a local bank in Florida that is heavily invested in the real estate market there with mortgages, and 

you are invested in that bank or you have your money in that 

bank, and the first hurricane comes through—it is not even a Category 4, now it is a 5; they are creating new numbers now because 

these hurricanes are so large because of climate change—Hell yes, 

you want to get your money out of that bank. Is that bank going 

to be sound? No, and of course, it is going to impact what you do. 

It is ridiculous. It is a nice speech when they say, ‘‘patriotism,’’ the 

coal companies and all this. It is B.S, climate change is happening, 

and I am not against energy companies. I think it is important to 

support energy companies, but at the same time, we are talking 

about banking here and insurance. 

I was in insurance for a while, and I have to tell you, one of the 

things that they do is they take a look at what are real risks, and 

they take a look at Florida, and they take a look at California and 
27 

other places. They know that because of climate change, it is becoming much more expensive to insure there, and they can’t get 

the price that they need, so either they are pulling out or they are 

shrinking. They are not stupid, and of course that is why you are 

taking a look at this. As bankers, you have to. There are real risks; 

climate-related risks are real risks. 

Somehow, my friends on the other side think that they are madeup risks. They are imaginary risks. Ask that to the people in 

Texas, we talk about the hurricanes, the people in Florida, or the 

fires in California. See how imaginary they are. Anyway, I will 

shut up now. I had my speech just like the other side. I just want 

to make sure I said that because it is so ridiculous. 

By the way, it was the same thing with Dodd-Frank. When I got 

here, Dodd-Frank was the boogeyman. Dodd-Frank was bad. Now, 

it is the gold standard. Why are we going to Basel III? We have 

Dodd-Frank. It is so great. I do have some problems with Basel III, 

but I do want to say this: When we go and participate in these 

international organizations, are they dictating to us what to do? I 

think you have already testified no, right? Dr. Gibson, why don’t 

we go to you first? 

Mr. GIBSON. No. Nothing that is discussed in the international 

groups we participate in is binding on the Federal Reserve. 

Mr. VARGAS. Yes, and the things that you talk about there, are 

they sneaky, nobody knows about them, and somehow they pop up, 

and then we have to enforce them here? Does that happen like my 

friends on the other side seem to be intimating? 

Mr. GIBSON. The groups we participate in, like the Basel Committee, publish their work plan annually, they publish summaries 

of the meetings, so the topics are in the public domain that they 

are discussing. 

Mr. VARGAS. Yes. In fact, we get them in our office. We get to 

see these things. I don’t know why they don’t get them over there 

on the other side. It seems pretty ridiculous to me. Now, I should 

ask you, because I do ask everybody, so I think it would only be 

fair, do you believe in climate change? If you could raise your 

hands? 

[Hands raised.] 

Mr. VARGAS. Okay. Thank you. That’s pretty consistent now with 

what we have had, and, again, I think it is very important to do 

that. And the last thing I would say is this: There seems to be this 

notion that we shouldn’t rely on professionals anymore, that somehow the politicians will get it right, and we should listen to what 

we say so much and not let you do your job. And maybe that is 

the anti-elitist fever and fervor that we hear, but let professionals 

do their job. If I need an operation, I am not going to let some kook 

operate on me; I want a doctor, someone who knows what they are 

doing. I want a professional to do that, and you guys are professionals. I hope they let you do your job. 

Again, I appreciate the work that you have been doing. I had a 

whole speech here, asking a whole bunch of other questions. Sometimes, they get my goat because of this whole climate-related imaginary thing, which is ridiculous. It is real, it is happening, it is big, 

and it is very problematic, and I am glad you all are taking a look 

at it. And with that, I will yield back, Mr. Chairman. Thank you. 
28 

Mr. DAVIDSON. [presiding]. I thank the gentleman. I now recognize myself for 5 minutes for questions. 

For a lot of my constituents back home, they will be sitting here 

watching this hearing, dozens of them, wondering what in the 

world has Basel, Switzerland, got to do with banks in America? 

Why do these globalist bankers keep going to Basel, Switzerland, 

and why do they make rules from these meetings in Basel and 

come to us? Why should we pay so much attention to Basel? 

Could you explain it to us, Dr. Gibson, what goes on in Basel and 

why it is important? 

Mr. GIBSON. In the Basel Committee, we are participating to 

support our statutory responsibility domestically for supervision 

and regulation and financial stability—— 

Mr. DAVIDSON. Our FSOC is supposed to submit to whatever 

happens in Basel? 

Mr. GIBSON. Nothing that is agreed upon in Basel or developed 

there is binding, and we make decisions based on our domestic 

statutory mandates. 

Mr. DAVIDSON. Under Dodd-Frank, under all bank regulations, 

so it is not really a treaty. It is just kind of this consensus that 

we should gather together regularly in Basel, Switzerland, and talk 

about the global financial markets and try to create some sort of 

stable international financial system. 

Mr. GIBSON. Having common standards helps the global financial 

system because U.S. firms that want to operate abroad have rules 

that they are familiar with, because we have a somewhat harmonized—— 

Mr. DAVIDSON. There is nobody from Basel making us do this. 

We are in a sense doing it to ourselves, right? 

Mr. GIBSON. We participate voluntarily, yes. 

Mr. DAVIDSON. Okay. I just wanted to be clear on that. Yesterday, our Housing and Insurance Subcommittee held a hearing on 

housing affordability in America, where we discussed the many 

issues homebuyers are facing in the current market. One issue we 

discussed briefly and I wanted to save for today’s hearing is the 

clear impact the proposal on Basel III capital requirements is going 

to have on homeownership in America, especially for low- to moderate-income borrowers, and especially for our rural, minority, and 

first-time homebuyers across the country. Mortgages issued to 

these borrowers would require a risk weighting of 70 percent 

versus 50 percent, so a pretty big increase. 

What is very clear is that as a result of this 20-percent increase 

in the risk-weighted capital requirement for low- to moderate-income (LMI) mortgages, lenders will be forced to decrease their 

lending to these borrowers. Because of Basel III Endgame, fewer 

mortgages will go to rural communities. Fewer mortgages will go 

to minority borrowers. Fewer mortgages will go to hardworking 

Americans who want to buy their first home. The Basel III 

Endgame will definitely make homeownership in America more expensive and the housing affordability worse unless it is reworked. 

I will say that the Chairman of the Federal Reserve gave us some 

hope. Although he seems very committed to it, he seems to be open 

to reworking it. 
29 

As we looked through this, I was reviewing several speeches and 

interviews that the Chairman of the Basel Committee has given in 

the last month, and he asserted that the Basel members are expected to have the outstanding standards implemented by the end 

of the year. Director Gibson, does that sound right to you, by the 

end of the year? 

Mr. GIBSON. I would say the timing is uncertain, because we are 

reviewing all of the comments that we received, and we will have 

to analyze all of those comments. 

Mr. DAVIDSON. This is also encouraging. When I hear folks in 

your position, or people like the Chairman of the Federal Reserve 

say, we may have to rework some things, that is essentially like 

what people back home might do screaming, it is a total disaster. 

We are going to have to fix it. So, I take it as good news because 

we know we have to fix it. 

Director Gibson, do you think that a robust public engagement, 

following the Administrative Procedure Act (APA), will ensure that 

whatever new capital requirements are fit for purpose for America’s financial institutions? 

Mr. GIBSON. Yes. That is the process we will do, and that is the 

goal we have. 

Mr. DAVIDSON. For others on the panel, any other concerns about 

the impact of Basel III on homeownership or the ability for people 

to get a mortgage in America due to some consensus in Basel? 

Mr. BILLINGSLEY. Yes. The issue you raise is probably one of the 

most prominent comments we have received, so I view it as critically important to get it right. 

Mr. DAVIDSON. Yes. I will just share from my personal experience 

as we look at the impact on small and mid-market firms as well. 

Public companies, big companies have access to the bond market. 

But for small and mid-market firms, their ability to access financial capital in America largely goes through banks. So, who is getting crippled? It is Main Street businesses over Wall Street companies. These are the businesses that dominate Southwest Ohio and 

a lot of America, a lot of where the jobs are. The ability to grow 

these businesses is hamstrung when you have globalist bankers 

come away from Switzerland and say, we are going to clamp down 

on lending. And it doesn’t just hit homeowners, it hits businesses, 

and it hurts the growth rate in our whole economy. So, I hope it 

is very strongly reworked. 

My time has expired, and I now recognize the gentleman from 

Illinois, Mr. Casten, for 5 minutes. 

Mr. CASTEN. Thank you, Mr. Chairman. And thanks to all of our 

witnesses. I think this has been a genuinely fascinating hearing. I 

just think it is mistitled, and I don’t mean that to be sassy. I say 

that because I think the appropriate title for this hearing is how 

is it that the Republican Party, the party of Reagan, has become 

so uncomfortable with global leadership, and I am not just saying 

that to cast aspersions. The Chicago Council on Global Affairs, a 

wonderful organization in Chicago, just did a survey they released 

last month that said that for the first time in nearly 5 decades, a 

majority of Republicans said that the United States should stay 

out, of rather than play an active role, in world affairs. 
30 

We are going to leave Congress this week, for 2 weeks, without 

even bringing a bill to the House Floor to provide aid to our friends 

in Ukraine to stand up to Vladimir Putin. It doesn’t seem like that 

long ago that the leader of the Republican Party was saying, ‘‘Tear 

down that wall, Mr. Gorbachev.’’ Now, nobody wants to stand up 

to him. I can’t find a single member of the Republican Party who 

is willing to suggest that someone who seems to have a fetish with 

the leader of North Korea, and is publicly refusing to support the 

United States obligations under Article 5 of NATO, to even say 

that might be problematic. 

And of course, yesterday, we had the Heritage Foundation in 

here, who has played a role in creating Project 2025, a conservative 

blueprint for the next Republican President, which suggests that 

the Treasury Department should withdraw from the World Bank, 

withdraw from the International Monetary Fund (IMF), and the 

Commerce Department should pull out of the Organisation for Economic Co-operation and Development (OECD) and terminate any 

program that even references the Paris Climate Accord. 

I guess my first question for you all is, do you believe that the 

United States should withdraw from international financial institutions and cede leadership to everybody else in the world? Does anybody agree with that proposition? 

[No response.] 

Mr. CASTEN. Good. Thank you. I am glad your organizations 

have done that. FDIC Chair Gruenberg recently said that climate 

change should not be viewed solely as a long-term threat, that 

weather events are already influencing insurance costs. We know 

that. Mr. Vargas has said that. It is affecting financial markets. 

Dr. Gibson, these are simple questions. But isn’t it beneficial for 

the United States to actually sit at the table and collaborate with 

our international climate counterparts to minimize climate risks, to 

understand them? 

Mr. GIBSON. Yes. We work with our international counterparts to 

support our statutory mandates. 

Mr. CASTEN. And shouldn’t we be collaborating with regional 

banks, and other central banks, making sure that we are working 

in lockstep with them? 

Mr. GIBSON. We do collaborate with other central banks, yes. 

Mr. CASTEN. Given the choice, would you like the United States 

to be in a leadership role at those tables or not at the table at all? 

Mr. GIBSON. We do play a leadership role in a lot of these groups, 

yes. 

Mr. CASTEN. Thank you. Ms. Gardineer, do you agree that climate risks are global and will affect all entities, sectors, and economies? 

Ms. GARDINEER. Yes, Congressman, I do. 

Mr. CASTEN. Wouldn’t banks with a global footprint actually benefit from having the United States at that table instead of leaving 

U.S. multinational companies to wait and sit there and have to do 

the bidding of whatever other international sovereign nation sets 

those rules? 

Ms. GARDINEER. It is really important for us to continue, and the 

value that we provide by having that collaboration with our global 

partners, I think, helps the United States and our financial system. 
31 

Mr. CASTEN. I come back to what I said at the start. It is fascinating that this sounds like such a partisan exchange, that you 

all are answering such simple questions with simple obvious 

truths, and I have sympathy for all of my colleagues across the 

aisle. I don’t know what I would do in their shoes. If my ability to 

hold this job depended on appealing to that small minority of 

Americans who do not believe that the United States should lead, 

but make up the majority of the Republican primary electorate. I 

get it, leadership is hard, but following people is the opposite of 

leadership. I thank you all for your leadership, I thank you for 

doing the right thing, and I hope that people who find leadership 

hard, find more satisfactory jobs than being a part of the leadership of the United States. Thank you, and I yield back. 

Mr. DAVIDSON. I thank the gentleman. The gentleman from 

Georgia, Mr. Loudermilk, is now recognized for 5 minutes. 

Mr. LOUDERMILK. Thank you, Mr. Chairman, and I want to 

thank all of our witnesses for being here and representing your respective agencies. 

Dr. Gibson, last year, I asked you some questions about the processes of developing the Federal Reserve’s Pilot Climate Scenario 

Analysis (CSA), and the sources of its funding. At the time, you 

didn’t know, but I also understand Representative Barr asked this 

question earlier, and from what I understand, you told him that 

the NGFS was funded partly by voluntary contributions from member banks. Is that true? 

Mr. GIBSON. Voluntary contributions from its members, which 

are central banks or supervisors, but they do accept external funding for certain projects that they run. 

Mr. LOUDERMILK. Okay. Since I wasn’t physically in here, I want 

to make sure of those. Now, let me do a follow-on question on that. 

Do any U.S. bank supervisory agencies voluntarily contribute to 

the NGFS? 

Mr. GIBSON. The Federal Reserve has not. 

Mr. LOUDERMILK. But you are not sure of any others? 

Mr. GIBSON. I wouldn’t want to speak for the others. 

Mr. BILLINGSLEY. The FDIC does not either. 

Mr. LOUDERMILK. Okay. 

Ms. GARDINEER. The OCC does not. 

Mr. LOUDERMILK. Okay. Thank you. I just want to make sure 

that was clear. 

On to another question. Dr. Gibson, as the Director of Supervision and Enforcement at the Fed, do you think it is important 

that you know what assumptions are being made to support the 

proposals that come out of your division? 

Mr. GIBSON. Yes. 

Mr. LOUDERMILK. Okay. In the participant instructions for the 

Pilot CSA, there were 75 references to the NGFS. In the instructions, the Fed asked banks to examine trajectories for climate and 

economic outcomes under hypothetical trajectories provided by the 

NGFS. Now, the Fed claims to have used NGFS trajectories because, ‘‘these trajectories are considered plausible and illustrative 

scenarios and do not have probabilities attached to them.’’ How did 

you evaluate whether these trajectories were plausible and what 

measure of plausibility was used? 
32 

Mr. GIBSON. When we were constructing the Pilot Climate Scenario Analysis, we considered the question of what scenarios to use 

and asked the banks to look at it. And we did, in those cases that 

you mentioned, decide to use scenarios that were produced by the 

NGFS, mainly because the banks were already familiar with them, 

so that would be the least-burdensome way to go about the exercise. 

Mr. LOUDERMILK. But was there a particular measure of plausibility other than what you have just described? 

Mr. GIBSON. Our technical experts evaluated them and were 

comfortable, yes. 

Mr. LOUDERMILK. When did the Fed believe it was important 

that these scenarios do not have probabilities attached to them? 

Mr. GIBSON. In our view, the scenarios that we were using for 

the Pilot Climate Scenario Analysis—I don’t think we know enough 

to attach probabilities to them, and the purpose of the exercise was 

not to attach probabilities to them. The purpose of the exercise was 

to give banks a chance to evaluate those scenarios and look at how 

they are evaluating those risks and their risk management around 

climate-related financial risk. 

Mr. LOUDERMILK. But without any probabilities? 

Mr. GIBSON. Without a probability attached. 

Mr. LOUDERMILK. Does the Fed formally endorse these scenarios 

as a supervisory standard when evaluating banks’ adherence to the 

joint climate risk guidance issued last year by the Fed, the FDIC, 

and the OCC? 

Mr. GIBSON. No. I would say these are not the scenarios that we 

would use as a standard. 

Mr. LOUDERMILK. Okay. A recent Basel Committee regulatory 

consistency assessment report says that U.S. agencies have adopted a stricter approach than the minimum standards prescribed by 

the Basel Committee. The stricter rules have not been considered 

as mitigants for the overall component level assessment of compliance. 

Dr. Gibson, is it correct that when U.S. standards are stricter 

than BCBS recommendations, the U.S. does not receive credit for 

those standards under the Basel Committee’s rating scheme? 

Mr. GIBSON. It is true that when the Basel Committee looks at 

countries’ regulations, they are only looking for differences in the 

downside direction. They are not evaluating the differences in the 

other direction. 

Mr. LOUDERMILK. Okay. So if the U.S. doesn’t receive credit for 

stricter standards, why exceed those standards? 

Mr. GIBSON. We get a lot of benefit from having standards that 

are appropriate for the U.S., whether or not they are identical to 

Basel standards. 

Mr. LOUDERMILK. Okay. I see I am short on time, so I yield back. 

Mr. DAVIDSON. I thank the gentleman. The gentleman from Illinois, Mr. Foster, is now recognized for 5 minutes. 

Mr. FOSTER. Thank you, Mr. Chairman, and, again, to our witnesses. Many of you have mentioned the fact that the U.S. is often 

a leader in these international discussions. Why do you believe that 

the U.S. is a leader, or at least first among equals in these discussions? Is it the size of our GDP or the primacy of the dollar or our 
33 

leadership in advanced technologies or just the expertise we have 

in certain areas? Is it explicitly written into the bylaws of these 

groups that the U.S. should have a leading role in these, or is it 

just de facto, because in a number of ways, we are the big dog in 

the international economy? 

Mr. BILLINGSLEY. I suppose I can start. For me, I think it starts 

with the FDIC’s mission, so I will give you an example. The International Association of Deposit Insurers is an international organization we are involved in, and it is fair to say that the rest of the 

world looks to us as the premier way to do that, so I think that 

is a particular area where we are the social leadership. 

Mr. FOSTER. Yes. Are there areas you are aware of where other 

countries or other areas may have more expertise in international 

trade? 

Mr. GIBSON. I would say one of the things we bring to the table 

is we have a high capacity for research and data analysis and that 

supports our engagement in these international groups, and it is 

often a way to move the international consensus to provide good 

data and arguments. I would say that is a strength of the U.S. participation. 

Ms. GARDINEER. I would add to that the expertise that we have 

across all of our agencies at the OCC. We do have, I think, the perspectives of the largest globally-active institutions down to some of 

the smallest community banks, and that purview gives us a lot of 

leadership capability to take to these international forums. 

Mr. FOSTER. Now, another area where we might gain from engagement with other countries is when you see failures that occur 

in other countries. There was this famous incident with the 

deepfake impersonation on some sort of Zoom that caused a $25- 

million erroneous transfer. I believe that happened in Hong Kong, 

if I am right, so there are lessons to be learned there. The biggest 

G-SIB that has failed, the only one since Dodd-Frank, was Credit 

Suisse, so there may be lessons there from which we can benefit. 

We are only 5 percent of the population of the world, and there are 

lots of ways that financial institutions can mess up that might be 

discovered earlier in other countries. Are there examples you can 

think of where we really gained a valuable lesson from experiences 

offshore? 

Mr. GIBSON. Just to give one example, the Basel Committee was 

founded 50 years ago because of the failure of a German bank that 

caused losses to U.S. banks through the foreign exchange market. 

And that was really the impetus for more international cooperation 

about what are cross-border banks doing and do we understand 

and supervise their risks adequately. That spurred more international cooperation because of the failure of a German bank. 

Mr. FOSTER. And have there been disasters averted that you can 

point to because of the understanding and this standardization, at 

least to some extent, of our approaches to different financial 

threats? 

Mr. GIBSON. I would say that the fact that we have had strong 

regulatory standards in the U.S. has been a source of strength for 

our banking system and our economy. I can’t point to particular 

banks where, because we did this, a bank didn’t fail, but overall, 

I think we have a strong system. 
34 

Mr. FOSTER. Yes. I came onto this committee in March of 2008 

when the roof was about to cave in, and began educating myself 

about things. I was pointed to the Canadian banking system, which 

was stodgy and overcapitalized at the time. But then when the crisis hit, being over capitalized went from being something that 

would be a source of derision to something that made the Canadian 

banking system the envy of a lot of countries, including some in the 

United States. And I believe that there is a lot to be learned from 

looking at the other 95 percent of humanity. 

Historians say there are two basic ways for countries to fail, one 

of which is to seal themselves off from the rest of the world, and 

pretend like they know all the answers. The other one is to just 

have an extractive elite that sort of benefits the incumbents and 

preserves their economic and political power. There are a lot of 

both of those strands in this hearing, and I think to maintain our 

strength, we have to keep ourselves open to the world and particularly open to the world’s ideas, and I thank you for your work in 

that regard. My time is up. I yield back. 

Mr. DAVIDSON. I thank the gentleman. The gentleman from 

South Carolina, Mr. Norman, is recognized for 5 minutes. 

Mr. NORMAN. Thank you, Mr. Chairman. As a follow-up, I will 

take Mr. Luetkemeyer’s questions about the involvement with Chinese and Russian banks as far as Basel. Mr. Gibson, did I hear you 

right that the climate risk didn’t affect any of its safeguards that 

Basel tries to implement—market risk, capital risk, operational 

risk? 

Mr. GIBSON. When we think about climate-related financial risks, 

we ask banks to think about the ways that they could manifest 

through all of those traditional channels, so that is the way we 

would look at it. 

Mr. NORMAN. Okay. I think he asked this. Could you give me one 

climate risk that the banks are facing now of which they need to 

be aware? Give me an example. Is it forest fires? Is it hurricanes? 

Give me one example. 

Mr. GIBSON. We did run this Pilot Climate Scenario Analysis last 

year that asked six large banks to look at, among other things, the 

scenario of a large hurricane hitting the East Coast and how that 

would affect their loan book. So, that is one example that banks 

have looked at. 

Mr. NORMAN. Mr. Billingsley? 

Mr. BILLINGSLEY. Yes. One good example is just the cost or availability of insurance, so that could impact the credit risk of an institution. 

Mr. NORMAN. Give me one climate risk that man can control, 

that would affect the banks and the Basel as far as the regulations 

and recommendations, and, as our friend from Georgia mentioned, 

there is no probability that is put with it. 

Mr. BILLINGSLEY. Right. I will agree with Mike that it is difficult 

to assign probabilities, but I think it is our job to assess all material risks, including ones where we can’t assign probabilities. 

Mr. NORMAN. All three of you raised your hands about climate 

risk. What if a bank just gave you one sentence: ‘‘We are not going 

to make allowances unless you define further with a probability of 

a climate risk.’’ What would be the consequences? 
35 

Ms. GARDINEER. What we have done, Congressman, is look at climate-related financial risks, and looking at that and the impact it 

could have on all of the risk, like credit risk, operational risk, market risk, et cetera. Risk management is at the core and our safety 

and soundness is the focus of what we are looking at when we look 

at climate-related financial risk. 

Mr. NORMAN. But what would be the consequences of a bank 

that did that? 

Ms. GARDINEER. I think if they were unable to manage their risk 

appropriately, our examiners would take normal courses of action 

to help them manage the risk to prevent any adverse consequences 

that could befall the bank or the communities. 

Mr. NORMAN. But Basel can’t come up with a firm example of a 

climate risk. If it is a hurricane, if it is a forest fire, put a probability on that and how that directly affects the banks. 

Ms. GARDINEER. I don’t—— 

Mr. NORMAN. But you all raised your hands that this is a real 

crisis, and I guess I am just trying to further drill down to see exactly what, and for the money and time that you are requiring by 

the banks because they are going to suffer the consequences. I 

think the foreign banks are going to laugh at it. Mr. Luetkemeyer 

mentioned the involvement of China and Russia from a national security standpoint. I don’t think they are our friends, having all the 

information from our financial records that you all have provided 

them, but I guess I am just trying to ask again about the climate 

risk, what are the foreign countries saying about your regulations 

and the consequences? 

Mr. GIBSON. When we engage with our international counterparts in talking about climate risk, many of them have a lot more 

active policies than we do. 

Mr. NORMAN. Which country? 

Mr. GIBSON. All of the other countries, pretty much. 

Mr. NORMAN. China? 

Mr. GIBSON. I would say Europe stands out as being very active 

on climate risk, in my experience. 

Mr. NORMAN. What about China and Russia? 

Mr. GIBSON. Not in my experience, no. 

Mr. NORMAN. Zero. They laugh at it. 

Mr. GIBSON. Russia doesn’t participate in the Basel Committee 

anymore. 

Mr. NORMAN. What about China? 

Mr. GIBSON. They participate. But I would say on the topic of climate risk, we are really in the early stages of learning what are 

the links from climate change to the risks that banks have on their 

balance sheet. That is why we are trying to build the capacity to 

understand that better, and banks are building that capacity as 

well. 

Mr. NORMAN. I yield back. 

Mr. DAVIDSON. I thank the gentleman. The gentleman from 

Pennsylvania, Mr. Meuser, is now recognized for 5 minutes. 

Mr. MEUSER. Thank you, Mr. Chairman. And thank you very 

much to the witnesses. A little earlier, we had a colleague making 

a very sanctimonious speech, which really doesn’t make it in the 

real world and shouldn’t here. I am not sure if my colleague under-
36 

stands that the United States—or knows his history—has done far 

better than the economies that we are trying now to collaborate 

with, as he put it, or to fall in lockstep. Leadership is not defined 

as falling in line with other weaker economies and bad ideas, and 

embracing Basel III is somehow described as leadership? No. No. 

Making Basel III better and forging a better path is leadership, 

and that is what we are trying to do. 

Not only that, every bank, every business that you speak to, 

large and small, has a problem with Basel III, the biggest banks 

in the country as well as very small community banks that come 

and see me. So, embracing Basel III Endgame is somehow leadership, and not falling in line is sanctimonious at best, and I find it 

very, very politically motivated because it doesn’t make any sense 

coming from a fellow Member. 

Anyway, we have a concern about the preservation of U.S. business sovereignty, and in the development and adoption of international standards. We want to have our say, and it doesn’t seem 

like we do when it comes to Basel III and many other rules that 

are being made. 

Mr. Gibson, how do your regulatory organizations prioritize U.S. 

business sovereignty and standards amidst the growing influence 

of international regulatory bodies on our financial regulations, such 

as the Corporate Sustainability Directive (CS3D) and other global 

paths, that the U.S. seems required to follow by your regulators? 

Mr. GIBSON. When the Federal Reserve participates in international groups, we are supporting our statutory responsibilities 

around supervision and regulation and financial stability, and we 

are working to shape those standards and recommendations to the 

needs of the U.S. financial system. But the standards in those 

groups aren’t binding, so we take decisions on our domestic mandates according to our domestic goals. 

Mr. MEUSER. I don’t know how many letters you got, and you 

couldn’t even name one that was positive. I would love to see the 

positive letter, by the way, if that is at all possible. If that letter 

was from an actual stakeholder, I would love to see it, if you can 

produce that for this committee. 

How is CS3D in the interest of American small business, because 

EUR 150 million, you have to comply, not just in Europe, but in 

the United States of America. Have we ever heard such a thing before? I would like to ask you, Mr. Billingsley. 

Mr. BILLINGSLEY. Yes. Sure. Something like a CS3D is really sort 

of outside of the remit of the FDIC, so it is not something we are 

interested in. It is not something you will see come out of us. It 

is really a European thing. 

Mr. MEUSER. Good, but according to Treasury Secretary Yellen, 

not necessarily. So that is a concern, and it seems to be a pattern 

to these global—how did he put it—collaborations. 

Let me ask Comptroller Gardineer, please, how does the OCC 

balance international standards, from your perspective, of the U.S. 

banking system, ensuring U.S. businesses remain competitive? 

Ms. GARDINEER. It gives us, Congressman, an opportunity, as we 

said earlier, to talk about raising standards, higher standards, and 

trying to ensure that there is a level playing field so that the U.S. 

financial system is not at a competitive disadvantage or losing mar-
37 

ket share to a more-lax jurisdiction that has lower standards or is 

leading a race to the bottom. 

Mr. MEUSER. And maybe just for all of you, do we integrate in 

a sincere, important way industry feedback in these international 

discussions? 

Ms. GARDINEER. Yes. 

Mr. MEUSER. Okay. 

Ms. GARDINEER. Yes, we do. 

Mr. BILLINGSLEY. Absolutely. 

Mr. MEUSER. Okay. Thank you. I appreciate that, and, Mr. 

Chairman, I yield back. 

Mr. DAVIDSON. I thank the gentleman. The gentleman from Wisconsin, Mr. Fitzgerald, is now recognized for 5 minutes. 

Mr. FITZGERALD. Obviously, we have discussed quite a bit about 

how the Basel proposal adopts legally-binding capital requirements 

originating from an organization that exhibits what in my estimation is no real legal authority. I have been particularly concerned with the proposals disincentivizing banks from offering conventional loans to first-time homebuyers and low- to moderate-income borrowers. This is an issue that I think if you are a Member 

of Congress, you are going to hear about continually when you are 

back in the district, and I think the lack of options will make buying a home even more unattainable than it already is today, certainly for Wisconsinites right now. 

Another major issue is the proposal’s operational risk component 

requiring banks to hold capital against fee and commission income 

as a proxy for operational risk. Under the proposal, a Wisconsin 

manufacturer trying to ship products internationally would need to 

pay more to get a bank letter of credit in order to facilitate those 

shipments, ultimately leading to higher costs or reduced availability for its products. In kind of a similar fashion, foreign direct 

investment in Wisconsin could be negatively impacted due to the 

increased capital, and the burden associated with that capital on 

foreign banks helping facilitate investment in Wisconsin. These 

issues, I think, kind of highlight the lack of analysis on how the 

proposal could affect users. 

Mr. Gibson, Vice Chair Barr has promised more analysis on the 

final rule, but why not do this analysis up front to increase the 

likelihood of kind of a better final product, I guess you could say? 

Mr. GIBSON. The notice of proposed rulemaking last year had an 

analysis of the impact, and we are doing more work during the 

comment period, and we got comments about the impact. We also 

did a special data collection during the comment period to be able 

to assess the impact, so we are going to take all that into account 

going forward. 

Mr. FITZGERALD. So, you are comfortable with the amount of information that is available to make those series of decisions, I 

guess, at this point? 

Mr. GIBSON. We are doing more work during the comment period 

with the information from the comments as well as from the special data collection, so we will be providing more information in the 

future, yes. 

Mr. FITZGERALD. Okay. Members of the military are routinely 

subjected to deployments and kind of permanent changes of station 
38 

and, therefore, more likely to have kind of longer periods of time 

when they don’t use open credit lines, I guess is the best way to 

describe it. In fact, active duty and reserve military members are 

30 percent more likely than the general public, within a 2-year period, to make a purchase using a credit card that hasn’t had any 

activity in the last 12 months. 

Under the Basel III Endgame proposal, off-balance-sheet items 

like unused credit card lines will be subject to an increased credit 

conversion factor applied to undrawn funds, reflecting the expected 

amount that could become an on-balance-sheet exposure, I guess, 

at some point. Due to the proposed conversion factor, banks could 

be incentivized to reduce or close unused or dormant credit lines 

to reduce their capital requirements. Let me just ask you, along 

those lines, have the agencies adequately contemplated the unique 

effect that the proposed conversion factor would have, specifically 

on servicemembers and the military community and their overall 

credit score? 

Mr. Gibson, I don’t know if you have a comment on that? 

Mr. GIBSON. Just to say that we have received those comments 

through the public comment process, so we are going to be carefully 

evaluating those and looking at them, yes. 

Mr. FITZGERALD. And before I run out of time, the capital proposal from the Fed and other financial regulators would impose 

huge costs on regional and mid-sized banks with little to no trading 

books to adopt the governance and data processes related to the 

new market risk rule. This proposal, on top of the other recent regulatory proposals, is bound to lead to, I am sure, some type of consolidation to overcome the compliance burden on the rulemaking. 

Do you believe allowing more banks to grow through acquisitions 

so that they are able to compete with the existing large banks 

would benefit the current ecosystem? And are you all worried about 

kind of damaging the breadth of the banking system, which obviously is kind of a national asset, by promoting more concentration 

and fewer regional banks who serve communities directly? 

Mr. GIBSON. I would say we benefit from having a banking system with a diversity of institutions, including large, regional, and 

community banks. 

Mr. FITZGERALD. Very good. Thank you. Mr. Chairman, I yield 

back. 

Mr. DAVIDSON. I thank the gentleman. The gentleman from New 

York, Mr. Torres, is now recognized for 5 minutes. 

Mr. TORRES. Thank you. In January 2022, Fed Chair Jerome 

Powell said, ‘‘Capital and liquidity levels at our largest, most systemically important banks are at multi-decade highs.’’ In June of 

2023, Fed Chair Powell described the banking system as, ‘‘very 

strongly capitalized.’’ 

In June of 2023, Treasury Secretary Janet Yellen said, ‘‘Our 

banking system is well-capitalized. There is adequate capital and 

liquidity in America’s banking system.’’ 

Dr. Gibson, do you agree with those statements from the Fed 

Chair and the Treasury Secretary? 

Mr. GIBSON. Yes. 

Mr. TORRES. The Fed Chair’s repeated reassurances about a wellcapitalized banking system seems to flatly contradict Basel III’s as-
39 

sumption of an undercapitalized banking system. What do you 

make of that contradiction? 

Mr. GIBSON. The main objective of the Basel III Endgame proposal was to make capital requirements more risk-sensitive and 

more consistent and adequately reflect risk. That is the goal. 

Mr. TORRES. Do you think the banking system is undercapitalized or sufficiently capitalized?? 

Mr. GIBSON. That is one of the things we are looking at through 

the comment period. We have gotten a lot of comments about that 

and we are going to evaluate it. 

Mr. TORRES. Because Fed Chair Powell described it as very 

strongly capitalized, and the rhetoric from the Fed historically did 

seem to suggest that it is sufficiently capitalized, I ask myself, 

given the well-capitalized state of the banking system, are we fixing what ain’t broken? What is the actual need for Basel III? A 

common refrain that I have heard about Basel III is that the 

United States must conform to European standards of banking, 

and I am wondering, where did we get this notion that the United 

States, as the financial superpower of the world, must conform to 

European standards of banking? 

As a U.S. policymaker, the most important question for me is not 

whether the U.S. banking system is acting in conformity with Europe’s banking system. The most important question is whether the 

U.S. banking system is achieving the best possible balance between 

economic growth and financial stability. That should be the question that matters to all of you. And do you believe, as I do, that 

the end goal should not be the Europeanization of the U.S. financial system; the end goal should be the optimization of economic 

growth and financial stability? 

Mr. GIBSON. Our goal is a strong U.S. banking system to support 

a strong U.S. economy. 

Mr. TORRES. Do you agree that the goal should be the optimization of economic growth and financial stability? 

Mr. GIBSON. Yes. 

Mr. TORRES. Okay. And have you conducted a study aimed at determining the level of capital requirements that would produce the 

optimal amount of economic growth and financial stability? 

Mr. GIBSON. The notice of proposed rulemaking last year included that information, and we have received a lot of comments 

about that and we are evaluating those. 

Mr. TORRES. Have you conducted a study? 

Mr. GIBSON. There were studies cited in the notice of proposed 

rulemaking—— 

Mr. TORRES. But has the Federal Reserve itself conducted a 

study to determine what level of capital requirements would 

produce the optimal amount of economic growth and financial stability? It is a simple yes-or-no question. 

Mr. GIBSON. Yes, and it was cited in the proposal last year. 

Mr. TORRES. Okay. You did conduct a study? 

Mr. GIBSON. It is in the proposal. 

Mr. TORRES. Okay. There are those who insist that Basel III capital requirements would have no impact on access to credit. The 

laws of economics tell us that there is no such thing as a free 

lunch, right? Nothing is free. Everything has a cost. Do you believe 
40 

that Basel III is an exception to the laws of economics, that Basel 

III is somehow a free lunch that would have no impact on the 

availability of credit? 

Mr. GIBSON. There are definitely costs and benefits. 

Mr. TORRES. It would have an impact on the availability of credit. There are housing finance agencies that have expressed concerns about the impact of Basel III on the Low-Income Housing 

Tax Credit equity investments, 85 percent of which come from the 

banking system. There are housing organizations that have expressed concerns about the impact of Basel III on minority borrowers and LMI borrowers who disproportionately access mortgages with lower down payments and higher loan-to-value ratios. 

Do you acknowledge that those are genuine tradeoffs? 

Mr. GIBSON. Yes, and we have gotten a lot of comments on exactly those issues, and we are definitely going to carefully consider 

those as we work on the final rule. 

Mr. TORRES. And you agree that an Act of Congress supersedes 

a Basel III recommendation. Is that fair to say? 

Mr. GIBSON. Yes. 

Mr. TORRES. So if there were a conflict between a congressional 

statute and a Basel III recommendation, the congressional statute 

should prevail, because there have been concerns that there is a 

conflict between Basel III’s requirement for standardization and 

Congress’ requirement for regulatory tailoring? 

Mr. GIBSON. Any proposal we make would be evaluated by our 

lawyers to make sure it is consistent with the statutory—— 

Mr. TORRES. I see my time has expired. 

Mrs. KIM. [presiding]. I now recognize the gentleman from Nevada, Mr. Horsford, for 5 minutes. 

Mr. HORSFORD. Thank you to the Chair and to the ranking member, and thank you to our financial regulators for appearing before 

the committee. 

The U.S. banking system is not only the powerhouse of our economy, creating jobs and opportunities across the country, but it is 

also the envy of the world, drawing capital from across the globe. 

It is our interconnected and global economy, our prosperity, which 

is inherently tied to the stability of the world markets. American 

authority on the world stage and close coordination with our allies 

makes us all safer from foreign adversaries but also from catastrophic economic shocks. And yet, there are those in the hearing 

today who have continued to demand that we abandon our international partners regardless of the risk. Our nation is certainly not 

stronger because of their continued criticism of the United Nations, 

their constant threats to pull out of NATO entirely, or their attempts to undermine efforts that protect the global financial markets. 

While we have outpaced our peer nations in our recovery, there 

are still looming risks that we must be able to work cooperatively 

with other countries to mitigate. One of these looming risks to our 

global economy is the ever-present dangers presented by climate 

change. It is a common refrain that America cannot stop the catastrophic effects of man-made climate change on its own, and yet, 

here we are, as some of my colleagues advocate to further weaken 
41 

our ability to garner international buy-in and to create a coalition 

large enough to tackle this very real problem. 

Our regulators and the Financial Stability Oversight Council established a committee specifically to advise on climate-related financial risk, but as this is a global issue, there is still more that 

we need to do to improve global monitoring and mitigation efforts. 

Banks and other companies are already hard at work dealing with 

the well-documented reality of climate-related financial risks because they already know that these risks are all too real. 

Dr. Gibson, what are the potential impacts on banks to carry out 

vital services like lending to small businesses, supporting minority 

communities, or to sector-wide stability, if climate change-induced 

risks are ignored? 

Mr. GIBSON. We are looking to make sure that banks are evaluating all of their material risks, including climate-related financial 

risks, and firms are looking at how climate change could impact 

their business models and their balance sheets. And as bank supervisors, we need to understand their operations and their risks. 

Mr. HORSFORD. Thank you very much for that answer, and I 

hope that we will all remember that the consequences of climate 

change will not be borne equally across the socioeconomic ladder. 

The safety and soundness of the global financial sector is crucial, 

but an equally important aspect of our continued coordination with 

international financial regulators is to reduce global regulatory arbitrage. 

Regulatory arbitrage arises when banks are able to escape jurisdictions with more-stringent regulations in favor of less-stringent 

ones, and our efforts to minimize the possibilities for these actions 

are critical to ensuring that more work capital remains within our 

borders. Our participation in international agreements and leadership in global organizations, both of which are attacked by the legislation posted for today’s hearing, allow us to encourage other 

countries to have strong safeguards similar to those found here in 

the United States. 

Mr. Billingsley, would you please discuss the effects on American 

competitiveness if we were to lose our global leadership in the financial sector and create an opportunity for increased instances of 

regulatory arbitrage? 

Mr. BILLINGSLEY. Certainly. I think the issue you raise is very 

important. The extent to which we can influence global minimum 

standards in a way that is in the best interest of the FDIC, that 

is in the best interest of the U.S. banking system, that makes the 

global financial system safer, I think that makes our banking system safer. 

Mr. HORSFORD. Just to close, I would like to reiterate to all of 

you that when we are participating in any of these international 

agreements, specifically around capital requirements, we must be 

conscious of the unintended impacts to segments of our population 

who have been traditionally excluded from the financial sector. 

Dr. Gibson, what processes does the Fed have in place to better 

understand and mitigate the effects of these regulations on communities of color or other marginalized communities? 
42 

Mr. GIBSON. We evaluate those impacts when we look at proposed regulations, and we have certainly received comments about 

that and we we evaluate them as part of our rulemaking process. 

Mr. HORSFORD. And I hope you will do the same as it pertains 

to Basel III, in line with the questions from my colleague, Mr. 

Torres. With that, I yield back. 

Mrs. KIM. Thank you. I now recognize myself for 5 minutes of 

questioning, and I want to thank all of the witnesses for being here 

today. 

I am all for U.S. participation in international bodies, and I see 

the importance and value in doing so. However, I also believe that 

involvement in global governance bodies does not mean financial 

regulators have a blank check to agree to international standards 

without properly consulting Congress. We need more transparency 

when U.S. financial regulators engage other countries on regulations that could reduce access to credit and capital for millions of 

American families and small businesses. Furthermore, our financial regulators should not constrain our global competitiveness by 

gold-plating regulations through proposals like the Basel III 

Endgame. 

I want to ask you, Director Gibson, would you agree that the 

Basel Committee on Banking Supervision’s core goal is to harmonize regulatory standards across international jurisdictions? 

Mr. GIBSON. Yes, as well as supervisory cooperation. 

Mrs. KIM. Yes. Sure. Since you agree, do you believe that the 

current Basel III Endgame proposal goes against the Basel Committee’s goal, since our international peers are watering down their 

own standards while we are gold-plating? 

Mr. GIBSON. The Basel Committee recognizes that each country 

has to take back the standards to their domestic context and make 

sure that what we do domestically is appropriate to our banking 

system and our economy. So, we do that process, and we don’t just 

automatically copy it over. 

Mrs. KIM. Yes. To me, it seems that we are fragmenting international standards rather than harmonizing, which could lead to 

greater risk for our financial stability. I want to point to the recent 

BCBS Regulatory Consistency Assessment Programme report, 

which states, ‘‘In the following areas, the U.S. agencies have adopted a stricter approach than the minimum standards proscribed by 

the Basel Committee. The stricter rules have not been considered 

as mitigants for the overall or component-level assessment of compliance.’’ 

So, I want to ask all three of you, our witnesses, is it your understanding that when the BCBS looks at the U.S. capital standards 

and their compliance with BCBS recommendations, stricter U.S. 

standards in some areas do not receive credit under the Basel Committee’s rating scheme? 

Mr. BILLINGSLEY. I think that is generally true. The way the assessments typically work is they are identifying areas where a jurisdiction standard might be below the global minimum rather 

than above. 

Mrs. KIM. I want to hear it from you two, as well. 

Ms. GARDINEER. I think that is an accurate statement. 

Mrs. KIM. Mr. Gibson? 
43 

Mr. GIBSON. Yes. The consistency assessments focus on deviations in the downward direction, not deviations in the upward direction. 

Mrs. KIM. Okay. I want to ask you, Senior Deputy Comptroller 

Gardiner, does Acting Comptroller Hsu monitor what OCC staff 

and officials are doing in their work with various global governance 

bodies such as the Basel Committee and NGFS, and are there regular reports on what staff and officials are doing and why they are 

doing it? 

Ms. GARDINEER. Yes. The staff that participate in any of the 

global forums that we are members of, regularly report back to the 

Acting Comptroller to get his position for the agency as we continue. That is an ongoing communication. 

Mrs. KIM. Thank you. I have the same question about Chair 

Gruenberg’s knowledge in monitoring what goes on with FDIC staff 

and officials at the global governance bodies. Deputy Director 

Billingsley, can you answer that? 

Mr. BILLINGSLEY. Absolutely. It is very similar to what Grovetta 

just stated. Anything we do at the staff level at any international 

engagement is done so with the direction of the Chairman. 

Mrs. KIM. And, Director Gibson, I have the same question about 

Chair Powell’s or Vice Chair for Supervision Barr’s knowledge in 

monitoring. 

Mr. GIBSON. Both Chair Powell and Vice Chair for Supervision 

Barr sit on the Basel Committee’s governance body, and the staff 

will be briefing Vice Chair for Supervision Barr on what is going 

on in the meetings and also to Chair Powell when it rises to that 

level. 

Mrs. KIM. Thank you. I know my time is up. The gentleman from 

North Carolina, Mr. Nickel, has joined us, so I will recognize him 

for 5 minutes. 

Mr. NICKEL. Thanks so much to our witnesses for being here. I 

would like to talk about the dominance of the U.S. dollar across the 

globe. The dollar is the world’s dominant reserve currency, which 

has significant advantages for the United States. Because other 

countries hold and use dollars for international trade, reserves and 

investments, the dollar is always in high demand, and the U.S. is 

able to pay less to borrow money because of it. American businesses and consumers can enjoy lower interest rates and easier access to foreign markets. Unfortunately, given China’s growth, there 

are already challenges to the dollar’s influence. The dollar’s share 

of official reserves fell to a 20-year low of 58 percent in the fourth 

quarter of 2022. We cannot afford to risk losing the economic and 

political benefits of the dollar’s dominance. Loans will be more expensive for the government, businesses, and for the working families I represent in North Carolina’s 13th district. 

The dollar’s unique status also enables us to influence global economic policies and maintain a significant role in international financial institutions. U.S. regulators are engaged in critical international conversations about cross-border payments. The G20 released a roadmap for enhancing cross-border payments to make 

them faster, cheaper, and more transparent while maintaining 

safety and security. I believe that the U.S. must be at the table for 
44 

these talks to advocate for our interests, such as maintaining the 

dollar’s role as the global reserve currency. 

The Financial Stability Board, or FSB, is the international body 

that coordinates the implementation of the roadmap, but partisan 

legislation put forward today would likely undermine U.S. regulators’ ability to actually work with the FSB. If Republican legislation prevents our regulators from engaging in these conversations, 

we risk being left out of the global economy. 

Dr. Gibson, my first question is for you. Chair Powell said here 

in the Financial Services Committee that, ‘‘The status of the dollar 

as the world’s reserve currency is a very important thing to us.’’ Do 

you agree with him? 

Mr. GIBSON. Yes. 

Mr. NICKEL. And do you agree that U.S. regulators, like the Fed, 

should be involved in international conversations with the FSB and 

G20? 

Mr. GIBSON. Yes. We benefit from those international discussions. 

Mr. NICKEL. And how do we benefit? 

Mr. GIBSON. We are able to influence the discussion in the international groups in a way that supports our objectives of a strong 

U.S. economy. 

Mr. NICKEL. And if the Congressional Banking Regulation Priorities and Accountability Act that was noticed for this hearing were 

enacted, what implications would that have for the Fed? 

Mr. GIBSON. I haven’t looked at the details of the legislation. We 

would be happy to look at it and get back to you. 

Mr. NICKEL. Next to you, again, Dr. Gibson, how does the Federal Reserve plan to collaborate with other U.S. regulatory bodies 

and international counterparts to maintain the dollar’s influence in 

these discussions? 

Mr. GIBSON. When we participate in the international groups you 

mentioned, like the G20 or the FSB, that are talking about issues 

like cross-border payments, we work with the other U.S. participants. In the FSB, it is the Federal Reserve, Treasury, and the 

SEC, and we would all work together to support the goal of a 

strong dollar. 

Mr. NICKEL. And what benefits would the U.S. lose if the dollar 

were no longer a global reserve currency? 

Mr. GIBSON. You mentioned some of the benefits already, which 

is that it strengthens our economy. It allows our debt markets to 

be very liquid, which has benefits across our entire economy. 

Mr. NICKEL. Chair Powell was recently here. He talked a lot 

about interest rates and where we are as an economy. If you would 

like, you are welcome to say, ‘‘soft landing,’’ a few times. If you 

want to take that opportunity, please, by all means go ahead. 

Mr. GIBSON. I can’t comment on any monetary policy. 

Mr. NICKEL. I think the gist of my conversation with him afterwards is he was never going to say those words either just because 

it is a jinx, but I am pleased at where we are heading and yield 

back the balance of my time. 

Mr. NUNN. [presiding]. I now recognize myself for 5 minutes. 

I want to thank the witnesses for being here in front of this committee today. You are all entrusted to be independent in protecting 
45 

the strength of the American economy in your respective agencies. 

However, in my short 14 months here as a freshman Member of 

Congress, I have witnessed continuous politically-charged decisions 

and, I would offer, backroom discussions that have left many folks 

out, including members on this committee on both sides of the 

aisle, as well as folks back in my hometown. I believe that we 

should all agree at the forefront that folks in Altoona, Iowa, should 

have a much larger say in our future economic success than modeling a regulatory structure that is being decided in Brussels, Belgium. 

With that, in January, I led a bipartisan letter to your agencies, 

along with a Senator from Kansas, Jerry Moran, who emphasized 

the impact of increasing bank capital requirements on the economy 

and the impact on our constituents, particularly those in the agricultural community. It was signed not only by bipartisan Members 

of this committee in the House, but also in the Senate. I was happy 

that the Fed at least acknowledged that we sent the letter over. 

And while you didn’t provide any detail in here other than an acknowledgement that you received the letter, I am still waiting to 

hear from the other two agencies, who have just turned a blind eye 

to responding to this committee. That is disappointing, so let me 

be clear: The actions of your agencies are hurting families back in 

small towns in Iowa as well as in large communities across the 

country. 

Director Gibson, your boss at the Fed stated that the Fed will 

make substantial changes to the final Basel III proposal. Is it correct that the next draft includes concerns that my farmers voiced 

months ago? 

Mr. GIBSON. We have heard those comments, and they will be reviewed as we work on the final rule, yes. 

Mr. NUNN. The follow-up then is, could these end-user concerns 

or other concerns have been mitigated if you had listened to them 

on the front end of this? 

Mr. GIBSON. We go through a public comment process precisely 

to make sure that everyone has the opportunity to comment, so we 

are getting those comments now, and we are carefully reviewing 

them. 

Mr. NUNN. For all of the panelists, I just want to be clear here. 

Would you agree that U.S. stakeholder input on the front end of 

these decisions is important for you to be able to execute on the 

backend when you make these decisions? Can I get a verbal yes or 

no? 

Mr. BILLINGSLEY. Yes, I think it is important. That is the purpose of the rulemaking. 

Ms. GARDINEER. Yes, it does support the rulemaking process. 

Mr. NUNN. I agree. 

Mr. GIBSON. Yes, that is part of our rulemaking process. 

Mr. NUNN. Good. I hope that we continue to have that before 

rather than after, and now I want to talk about competitiveness. 

Right now, we are holding American companies to international 

regulatory standards when, despite this action by the current Administration, our economy remains the envy of the world. In fact, 

the U.S. has 4.4 percent of the world’s overall population. As we 
46 

all know, we have over 50 percent of the equities and debt raised 

in the world. 

So for each of you, if the world comes to us for capital market 

solutions, then why do we continue to look to Europe as the leader 

when it comes to its financial markets? This is not a rhetorical 

question. It is one that we are currently engaged in. And why are 

your bodies imposing more-stringent standards on an American 

company when our international peers implement the minimum 

recommendations for global standards, as we have seen time and 

time again? 

Mr. GIBSON. We are proposing rules like the capital proposal 

based on our domestic statutory mandates, and that is what we 

consider. And we have received the comments and we are evaluating those. 

Mr. NUNN. Mr. Billingsley? 

Mr. BILLINGSLEY. I think, to Mike’s point, we are trying to implement rules in the United States that are fit for purpose here, but 

the comment process is critically important. 

Ms. GARDINEER. As we engage in the rulemaking process, Congressman, I think we take into account the particularities of the 

U.S. financial system in proposing and then receiving comments 

that we take into account before we move forward to finalize any 

rule. 

Mr. NUNN. Just as a quick reminder for all of us here, the U.S. 

economy continues to lead because of the great success of the 

American enterprise, and including that of the rest of the world 

continues to follow our lead. Perhaps, we should emphasize the fact 

that we are leading in this area and not continue to restrict in this 

area, in my feelings, very arbitrarily. I remain concerned that if we 

continue on this path, every agency will be a climate regulator in 

5 years, across-the-board here. 

Director Gibson, is it consistent with the Federal Reserve to say 

it is not a climate policymaker while simultaneously being committed, throughout the Fed’s work, that furthering the NGFS goals 

amounts to a climate policymaking regime? 

Mr. GIBSON. The Federal Reserve is not a climate policymaker. 

We have responsibility for bank supervision and bank safety and 

soundness, and we only take climate-related financial risks into account to the extent they interact with our existing mandate. 

Mr. NUNN. My time has expired. At this point, I would like to 

thank Dr. Gibson, Mr. Billingsley, and Ms. Gardineer for your testimony today. I know this has been a long process, and I appreciate 

you all being here. 

The Chair notes that some Members may have additional questions for this panel, which they may wish to submit in writing. 

Without objection, the hearing record will remain open for 5 legislative days for Members to submit written questions to these witnesses and to place their responses in the record. Also, without objection, Members will have 5 legislative days to submit extraneous 

materials to the Chair for inclusion in the record. 

The hearing is now adjourned. Thank you. 

[Whereupon, at 12:37 p.m., the hearing was adjourned.] 
(47) 

A P P E N D I X 

March 21, 2024 
48 
49 
50 
51 
52 
53 
54 
55 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 
101 
102 
103 
104 
105 
106 
107 
108 
109 
110 
111 
112 
113 
114 
115 
116 
117 
118 
119 
120