On quarterly earnings calls set to begin next week, investors will be listening closely to CEO comments for any hints of how banks might deploy excess capital if they are no longer deemed systemically important.
The announcement comes after a Federal Reserve Board task force issued a report in September that said it would further examine options for modernizing the U.S. payments system.
Policies to shore up banks’ corporate cultures have remained a low priority even though some regulators want to attack the issue head on. Strengthening a firm’s ethical values may best be left to a bank’s internal brass.
San Francisco Fed President John Williams is not suited to lead the most important of the regional Fed banks, given his inability to detect the phony-accounts problems at Wells Fargo. He also lacks of Wall Street experience.
In his last major speech as the agency’s No. 2, Thomas Hoenig said it would be a “serious policy mistake” to relax measures such as the supplementary leverage ratio, but he was more open to regulatory relief in other areas.
In an interview with American Banker, the outgoing president of the Federal Reserve Bank of New York discussed changes in supervision, bank culture and his advice to his successor.
Payouts on Wall Street averaged $184,000, following only 2006’s record high; ethics office eying $500 million of real estate loans made to Trump son-in-law.
The departing New York Fed president said Monday that the banking industry should improve its culture, better aligning pay with long-term stability and removing bad actors.
The regulatory relief bill frees some regional banks from the tough supervision reserved for larger companies, but regulators still can subject them to onerous requirements.
