Fed's Yellen says holding one banking rule, capital surcharge, in place

Federal Reserve Chairman Janet Yellen delivers the semi-annual testimony on the "Federal Reserve's Supervision and Regulation of the Financial System" before the House Financial Services Committee in Washington, U.S., September 28, 2016. REUTERS/Joshua Roberts

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen on Wednesday told Congress that the regulator had no plans to lighten a capital standard in its review of how to ‘stress test’ the largest U.S. banks.

At issue is a capital ‘surcharge’ on the largest banks that do not satisfy the Fed that they can weather a severe economic downturn.

“We are not reconsidering, at this time, calculation of the surcharges,” Yellen said.

The surcharge requires banks to hold more capital to weather an economic downturn rather than return that wealth to investors.

Reporting By Patrick Rucker; Editing by Andrea Ricci