WASHINGTON — Federal Reserve Board Governor Susan Schmidt Bies told a room full of credit union representatives that she personally was supportive of the idea of risk-based capital in general.
Clarifying that she was not speaking for the Federal Reserve Board, Bies said she is generally supportive of the idea of risk-based capital, but difficulties for smaller institutions should be considered in implementation. "I firmly believe capital should follow risk," she stated in response to a question from former NCUA Chairman Dennis Dollar during NCUA Vice Chairman Rodney Hood's Risk Mitigation Summit. "If not, you can get a false sense of security."
However, the impact on smaller institutions must be considered, Bies said referring to BASEL II and Ia. "We have to be cautious about how we have to move forward," she said.
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