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Fed Rethinks How to Define a Big Bank - ABI

The Federal Reserve could broaden the number of banks receiving regulatory relief from Trump-appointed officials under an initiative that changes how it defines a big bank, the Wall Street Journal reported. As part of a series of rule changes still under development, the Fed is preparing to revise asset-size and other thresholds in its capital and liquidity rules. The changes could lead to lower regulatory costs for some large U.S. banks, including Capital One Financial Corp., PNC Financial Services Group Inc. and U.S. Bancorp. It is less clear that the changes will help gigantic firms the Fed considers “systemically important” to the global financial system, such as Citigroup Inc. and Goldman Sachs Group Inc. Likely candidates for the rule changes include the liquidity coverage ratio, which requires banks to hold assets they can easily convert to cash in a pinch, and “advanced approaches” rules, one of several capital regulations that limit banks’ borrowing. Fed Vice Chairman for Supervision Randal Quarles, who is set to testify today before the Senate Banking Committee, has previously said those rules are worth revisiting.

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