The media reports that the chairman of the Federal Reserve System, Jerome Powell, took part in a closed meeting with bank executives and urged them to cooperate with the financial regulator of the United States to avoid years of litigation over the proposal of the administration of US President Joe Biden on capital.

Mr. Powell informed the chiefs of banks, including JPMorgan Chase & Co.’s Jamie Dimon and Citigroup Inc.’s Jane Fraser, that the public will have the opportunity to form their own assessment of the main changes in the capital plan. The relevant information was released by the media with reference to insiders who were aware of the content of the Fed chairman’s conversations with the chiefs of financial institutions. Insiders also say that the mentioned communication took place as part of last month’s gathering hosted by the Financial Services Forum, a trade group for the largest US banks.

It is worth noting that for Fed officials, meetings with the chiefs of financial institutions are not what can be described as an unusual decision or non-standard practice. At the same time, the communication that took place last month is a sign that Jerome Powell is using his influence to try to get consensus from the industry and Fed governors. The goal in this case is to push the package across the finish line.

The project, which became a kind of response to the global financial crisis of 2008, has been in the works for more than a decade. In this case, there was opposition from the industry, which is preparing for a possible legal fight.

The Fed has already presented to other regulators a weaker version of the bank-capital overhaul. Against this background, some observers have expressed doubts that the board of the central bank of the United States, proud of the consensus, will actively defend this proposal, known as Basel III.

The initial draft, published last July by the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, provided for a total capital increase of 16%, which banks should have as a cushion against financial shocks. Later, the financial regulator of the United States presented to other regulators another document with possible changes, which provides for a 5% rise in the mentioned indicator.

As we have reported earlier, Fed’s Raphael Bostic Says More Data Needed to Rate Cut.