WASHINGTON —The Federal Reserve Board will release a proposed framework next week on how it will supervise large banks following enactment of a recent law that provided some institutions with regulatory relief.
The reg relief bill passed in May raised the Dodd-Frank Act threshold for banks facing enhanced prudential standards from $50 billion to $250 billion of assets. The Fed retained discretion to still apply standards to certain banks above $100 billion, and bankers have awaited guidance on how the central bank will exercise that discretion.
The proposal before the Fed board at an open meeting Oct. 31 is expected to address supervisory standards for banks with between $100 and $250 billion of assets.
The Fed is also expected to consider tailoring certain standards for institutions above $250 billion of assets that do not hold the designation of "global systemically important banks" — or G-SIBs.
In July, Fed Vice Chairman for Supervision Randal Quarles
Quarles also said that some large banks that exceed assets of $250 billion should be provided some regulatory relief to differentiate them from the eight banks that are considered G-SIBs.
Meanwhile, the Fed is also being urged to cut the G-SIB surcharge, an additional capital charge for the largest banks based on their reliance on wholesale funding.
In July, a group of Republicans on the House Financial Services Committee
However, also in July, Fed Chairman Jerome Powell told the committee that he is “not really seeing that case is made at this point” that any such relief is warranted for the nation’s largest banks, signaling that a G-SIB surcharge may not be among the regulator’s top priorities.
