The Federal Reserve Board unveiled a host of proposed changes to tailor U.S. supervision of foreign firms, as well as a proposal easing “living will” requirements for both domestic and overseas banks.
Banks say regulatory relief efforts should go even further, while public interest groups — and even one of the Fed’s regional offices — say the proposals to roll back supervisory standards go too far.
Fintechs are developing data-crunching, automated products that seek to help banks precisely calibrate capital levels. The banks' goal is to pass stress tests while maximizing returns to investors.
On the verge of controlling the Financial Services Committee, House Democrats criticized proposed changes to the Federal Reserve Board's post-crisis supervision program.
The banking agencies have proposed weakening several liquidity, capital and stress test requirements without considering the cumulative effect of the many changes being undertaken.
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.
Regional banks were the ultimate winners in the Federal Reserve’s proposal to tailor supervision, but rules for the biggest banks remained largely unchanged.
The Federal Reserve System is trying to be proactive in these and other high-profile areas, offering educational materials and coaching to bank execs and directors, according to supervision officials at the St. Louis and Richmond Fed banks.