WASHINGTON—The Federal Reserve is working on new rules that would change how it defines a big bank and potentially lower regulatory costs for a broader number of financial institutions, according to a new report.
A series of potential rules changes are being considered by the Fed, including revisions to asset size and other thresholds in its capital and liquidity rules, the Wall Street Journal reported.
Sources indicated the changes might ease regulatory costs for some large U.S. banks, such as Capital One Financial Corp and PNC Financial Services Group, while it remains uncertain how the proposals would affect much larger banks and those deemed “systemically important,” such as Citigroup and Goldman Sachs.
“The proposed moves are part of the Trump administration’s broader push to revisit bank rules it believes are overreaching,” the Journal reported. “Critics of the changes say they dial back regulations intended to prevent a repeat of the 2008 financial crisis.”
The 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, the Journal said.
Discussion During Meeting
The potential changes were discussed at a recent meeting between top officials at the Fed and the two other primary U.S. bank regulators, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., sources told the Journal.
“But it wasn’t clear when the Fed would formally propose the changes. The regulator has a crowded agenda and some of the changes also may require approval by other financial regulators,” the publication noted.