Jay Powell faces an intensifying debate within the Federal Reserve over calls for the central bank to boost big banks’ capital requirements to rein in financial risks — a move that would trigger fierce political blowback from Republicans eager to ease regulation.

Policymakers including Loretta Mester, the Cleveland Fed president, Eric Rosengren of the Boston Fed and Neel Kashkari of the Minneapolis Fed have advocated lifting the so-called countercyclical capital buffer (CCyB), a Fed measure aimed at bolstering global banks’ strength during periods when risks are rising in the financial system.

But the decision rests with the Fed’s board, chaired by Mr Powell, who insisted in June that there was no current need to lift the buffer because financial stability risks were under control.