The US Federal Reserve plans to soften regulatory requirements for large banks
Quick Look
- The US Federal Reserve is considering raising the asset threshold for banks subject to strict supervision.
- It is expected that the bar will be raised from 100 to 150 billion dollars, which will allow credit institutions to reduce regulatory costs.
AI-generated summary
Why It Matters
Current supervisory standards for banks with assets of $100 billion or more were established in 2019.
The Federal Reserve System (FRS), which performs the functions of the Central Bank in the United States, is going to raise the threshold for the volume of assets, upon reaching which large American banks are subject to stricter supervision. Reuters reports this with reference to its own sources, noting that the weakening of control over credit institutions, which will affect some of them, will make it possible to avoid additional costs for compliance with regulatory requirements relating to liquidity, capital and other indicators.
This level is expected to be indexed taking into account inflation and economic growth rates. According to one of the agency’s interlocutors, the Fed will make a proposal to increase it, including from $100 to $150 billion, this year.
It is noted that current regulations in this area were established in 2019, and the growth of assets to 100 billion usually requires financial institutions to invest heavily in personnel responsible for compliance with regulatory requirements, which can cost tens of millions of dollars annually.
What to Watch
AI outlook — possibilities, not facts
The Fed will propose raising the asset threshold this year.
Likely · Within months
Open Questions
- When exactly will the formal proposal be submitted?
- Which specific banks will fall under the new criteria?
