Federal Reserve Chairman Jerome Powell said Wednesday that he does not think revamping capital or liquidity requirements is necessary despite recent volatility in the repurchase markets.
The central bank finalized a host of regulatory-relief changes mostly benefiting midsize and regional banks that hew closely to proposals issued in April and last fall.
Despite concerns over how regulatory requirements affect short-term funding markets, the central bank is not considering a reduction in the liquidity coverage ratio, Jerome Powell said.
The ratings agency said that it views rollbacks of stress-test comparisons and liquidity coverage ratio requirements as "negative" for banks with between $100 billion and $250 billion of assets.
The Federal Reserve Board plan to revise its post-crisis framework promises reduced compliance costs and other benefits. But some analysts see the removal of guardrails as increasing failure risk, which may spook investors.
In a highly anticipated proposal, the central bank outlined a new approach for its post-crisis supervisory program that divides banks into different tiers based on size.
The Federal Reserve Board’s meeting to discuss supervisory standards for midsize institutions will be closely watched by regulatory relief advocates and those who want the Fed to maintain its firm hand.
