Regulatory Capital: Category I and II Banking Organizations, Banking Organizations with Significant Trading Activity, and Optional Adoption for Other Banking Organizations

The Prime Mover Institute, a public interest organization, supports the proposed rule as a step toward objective, risk-based banking and ending "debanking" practices. They argue that the rule should include specific guardrails to prevent banks from using biased climate risk assessments to unfairly increase capital costs for energy-intensive industries.

The International Capital Market Association (ICMA) and the International Securities Lending Association (ISLA) submitted a joint comment supporting the recognition of modular, cross-product netting architectures within the Basel III Endgame framework. They argue that recognizing these existing industry-standard frameworks (like the CPMA) will preserve operational efficiency, accurately reflect net economic exposures, and maintain liquidity in the securities finance markets.

The Coalition for Derivatives End-Users, representing 94 companies and municipalities, opposes the proposed capital requirements because they impose undue costs on commercial hedging and create regulatory redundancies. They specifically argue for exemptions for commercial end-users from CVA risk capital requirements and the retention of the SA-CCR alpha multiplier to maintain a competitive advantage for U.S. firms.

Arch Capital Group, Ltd. supports the proposed risk-based capital requirements but argues that the current proposals fail to sufficiently recognize the loss-mitigating benefits of private mortgage insurance (MI). The company advocates for specific amendments that allow banks to recognize MI coverage (subject to a counterparty haircut), permit insurance-based credit risk transfer (CRT), and lower risk weights for prudentially regulated eligible guarantors to improve bank participation in the mortgage market.

U.S. Mortgage Insurers (USMI), representing private mortgage insurance companies, supports the agencies' efforts to modernize bank capital rules. They argue that the final rules should explicitly recognize private mortgage insurance (MI) in the calculation of a mortgage's exposure-based loan-to-value (LTV) ratio to better align capital requirements with actual risk.

Morgan Stanley supports the core design and objectives of the Basel III and GSIB Surcharge proposals, advocating for prompt adoption and specific transition arrangements. They argue that the proposals provide a coherent, risk-sensitive framework that balances banking stability with the need to support credit and market-making activities in the U.S. economy.

CME Group supports the proposed revisions to bank regulatory capital rules, particularly those that align capital costs with the risk benefits of central clearing. They advocate for the inclusion of cross-product netting in SA-CCR, the exclusion of centrally cleared client activity from CVA risk capital charges, and the exclusion of cleared derivative transactions from G-SIB surcharge indicators.

The Goldman Sachs Group, Inc. supports the proposed revisions to the regulatory capital framework, noting that the proposals make meaningful progress toward modernizing and streamlining the system while enhancing risk sensitivity. However, the firm argues that further refinements are necessary to avoid overstating risk and imposing disproportionate costs on capital markets, specifically regarding operational risk capital, hedge recognition in the FRTB-DRC, and CVA framework calibrations.

Northpointe Bank, a nationwide mortgage lender, opposes the proposed risk-based capital requirements for warehouse facilities because they assign a high corporate-style risk weight (95%) to these facilities instead of a lower weight based on the underlying mortgage collateral. The bank argues that these punitive capital requirements increase lending costs for consumers and requests that the agencies either allow a look-through approach or reduce the risk weight to no more than 50%.

Euclid Mortgage, a managing general agency for credit risk reinsurance, opposes the proposal because it fails to adequately account for the reinsurance market as a credit risk transfer tool. They argue that the current definitions and risk weights create hurdles for community and regional banks, and they request specific amendments to include prudentially regulated insurance entities as eligible guarantors with lower risk weights.