stress tests

Pinnacle Financial wanted to be in high-growth markets. BNC Bancorp saw more regulatory burden looming and limited opportunities to sell itself. Those factors spurred what is currently the year's second-biggest bank deal.

The recent decision by the Federal Reserve Board to exempt banks with less than $250 billion in assets from the qualitative aspects of the CCAR stress tests may be a sign of things to come, says Joo-Yung Lee, head of North American financial institutions at Fitch Ratings.

As banking leaders gain a more substantial policymaking role, they will have a greater impact if they stake out a clear position in favor of regulations that protect investors and depositors.

The House proposal establishes a 10% leverage ratio as the standard for bank strength, but it says nothing about the riskiness of the bank’s business or the size of its exposure to economic downturns.

A House plan to provide regulatory relief will be more far-reaching when it is reintroduced soon by rendering the consumer protection agency toothless and providing banks with extra incentives to opt into a deregulatory plan.