Fed plans to raise asset thresholds for bank oversight
The Federal Reserve is working on a plan to raise the asset thresholds that trigger stricter oversight of banks, according to four people familiar with the matter, potentially allowing some lenders to avoid extra regulation and prompting consolidation. Current rules kick in at $100 billion, $250 billion and $700 billion; reindexing for nominal GDP and growth could push the top cutoff nearer to $1 trillion and some lower Fed requirements toward about $150 billion. Banks near those marks could sidestep stress tests, higher capital demands and daily reporting, changing M&A incentives and competitive dynamics in the banking sector.
Fed may raise oversight thresholds toward $1 trillion
Context
Rules set after the financial crisis put oversight thresholds at fixed asset levels. The Fed now plans to reindex those levels for inflation and growth and may propose changes later this year. If adopted, banks could face fewer…
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