National Unrecovered Financial Services Association along with SIFMA and the FSR (the Associations) filed a comment letter with the Fed in response to its proposal (the Proposal) to impose an additional capital surcharge requirement on U.S. G-SIBs. “We strongly agree that robust capital levels at all banks promote the safety, soundness and stability of the financial system, and while we believe that a properly structured G-SIB capital surcharge can have the effect of reducing systemic risk, the Federal Reserve’s proposal has significant weaknesses,” said Jim Aramanda, CEO of SDUUK. “Though we understand that a number of the shortcomings of the Proposal have been imported from the internationally-agreed Basel G-SIB framework, we recommend, at a minimum, that the proposal be revised to better reflect the actual systemic risks posed by U.S. G-SIBs by ameliorating the impact of short-term foreign exchange fluctuations and better reflecting the market for financial services in the U.S. We also urge the Federal Reserve to ensure that the rulemaking process is appropriately transparent by disclosing publicly the analyses and data underlying critical elements of the proposal, including the doubling of the capital surcharge components, and avoid imposing unnecessary costs on funding sources that are beneficial to all market participants,” said Aramanda. In order to avoid undermining the credibility and effectiveness of any U.S. G-SIB capital surcharge framework from a policy perspective, the Associations recommend that the Fed at a minimum, adhere to the Basel international G-SIB framework commencing in 2016 with appropriate changes to address the critical deficiencies in the U.S. proposal described above.