Opening Statement by Chairman Ben S. Bernanke
The final rule that we're considering today puts in place a comprehensive regulatory capital framework that the Board has been developing for some time in consultation with our domestic and international colleagues. Critically, this framework requires banking organizations to hold more and higher quality capital, which acts as a financial cushion to absorb losses, while reducing the incentive for firms to take excessive risks. With these revisions to our capital rules, banking organizations will be better able to withstand periods of financial stress, thus contributing to the overall health of the U.S. economy.
The final rule fulfills the U.S commitment to implement the revised international regulatory capital framework, known as Basel III, for the largest, most internationally-active banking organizations. The rule also incorporates macroprudential aspects that complement the Board's broader financial stability agenda. Today we will also be considering proposed technical changes to the market risk capital rule that became effective in January of this year to conform with the final rule.
I look forward to today's discussion of this important initiative and I welcome the staff as well. Let me turn the meeting over to Governor Tarullo, who has played a key leadership role in this rulemaking process.