Former and current regulators are concerned about the lack of robust analysis to justify the Basel III Endgame proposal and its unintended consequences if implemented. 

• Federal Reserve Governor Michelle Bowman stated that regulators must consider the direct and indirect consequences of capital reform when reviewing the proposal: "Any next step in this rulemaking process will require broad and material changes. It should also be accompanied by a data-driven analysis of the proposal and informed by the significant public input received during the rulemaking process. This should assist policymakers in creating a path to improve the rulemaking. My hope is that policymakers pay closer attention to the balance of costs and benefits and consider the direct and indirect consequences of the capital reform." (Federal Reserve Governor Michelle Bowman, "Perspectives on U.S. Monetary Policy and Bank Capital Reform," 6/25/2024)
• Former Federal Reserve Governor Dr. Randall Kroszner warned that the proposal may impact banks' ability to provide loans and credit, shifting financial activity to nonbanks and diminishing the resiliency and vitality of the U.S. economy: "As a result of the proposal, banks may reduce their activities or withdraw from providing critical products or services as they face nonbank competitors that are not subject to these regulations. Critically, this shift to nonbanks could have the unintended consequence of diminishing the financial stability and economic resiliency and vitality of the U.S." (Randall Kroszner, American Banker, 2/29/2024)
• Former Federal Reserve Vice Chair for Supervision Randal Quarles argued that the proposal will drive activity out of the well-supervised and well-regulated U.S. banking system, calling it "worse than a crime:" "The proposal would create a very unlevel playing field, both between banks and nonbanks, and between U.S. banks and foreign banks … this will drive activity out of the well-supervised and well-regulated U.S. banking system into the weaker parts of the system … It is worse than a crime. It is a blunder. And finally, this is not the time. The Fed is trying to calibrate a slowing of inflation, which will necessarily involve a slowing of the economy because it is taking so long." (Former Federal Reserve Vice Chair for Supervision Randal Quarles, The Federalist Society, 4/10/2024) 

One thing is clear: regulators need to scrap the proposal and start over.