The Fed is considering lifting the lower threshold for some requirements from the current $100 billion in assets to around $150 billion, and the highest threshold from the current $700 billion to around $1 trillion, according to the report.
The thresholds trigger additional regulation, including stress tests of their balance sheets, liquidity and capital, and require banks to invest tens of millions of dollars a year in more compliance staff, risk management systems, stress-testing capabilities and regulatory reporting infrastructure, per the report.
Raising the thresholds would account for the inflation and economic growth that has occurred since the current thresholds were set in 2019 and would free some banks from those additional regulations, the report said.
The Fed could propose the higher thresholds later this year, according to the report.
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The Fed declined Reuters’ request to comment on the claims, per the report.
Federal Reserve Vice Chair for Supervision Michelle Bowman said in January that the Fed would consider reindexing the thresholds, but the Fed has not commented since them, according to the report.
The Federal Reserve has made other efforts to reduce the regulatory burden on banks and tailor its supervision to the size of the bank.
Bloomberg reported in June that Bowman had completed a reorganization of the agency’s bank oversight unit with the aim of focusing supervision on core financial risks.
Bowman said in an October speech last year that the bank regulatory system had grown “extensively” in recent years, had become overly complicated and had imposed “unnecessary and significant costs” on banks and their customers.
In March, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency announced proposals that they said would improve certain parts of the capital and stress-testing requirements that were increased or introduced in the wake of the global financial crisis.
The three banking regulators said their proposals would streamline capital requirements for banks of all sizes, better align regulatory capital with risk, and maintain the safety and soundness of the banking system.
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