Washington: A top official at the Federal Reserve has signaled that the US central bank is preparing changes to banks' capital requirements. Speaking at a Thursday policy forum hosted by the Cato Institute, US Federal Reserve Vice Chair for Supervision Michelle Bowman emphasized the importance of capital requirements as a cornerstone of the prudential regulatory framework. According to Anadolu Agency, Bowman noted that the Fed plans to propose rules in the coming weeks to implement the final phase of the Basel III standards in the US. She highlighted that these changes to the capital framework aim to eliminate overlapping requirements, adjust calibrations to match actual risk, and address long-standing gaps in the prudential framework comprehensively. Bowman added that regulators have developed proposals to revise four key elements of the regulatory capital framework for large banks: stress testing, the supplementary leverage ratio, risk-based capital requirements under Basel III, and the surcharge applied to Global Systemically Important Banks. She also cautioned that continuously increasing capital levels without a clear objective could impose costs on the real economy, potentially undermining banks' ability to provide credit. Bowman further stated that the Fed is taking steps to modernize capital rules and is collaborating with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation to jointly propose rulemaking changes.