The regulatory rollback may be rolled back.
It has been a key aim of the Republican Congress and President Donald Trump's administration over the past several months, and an explicitly stated goal: to unwind regulations governing the U.S. financial system that have been in place since the financial crisis began back in 2007.
But, as noted in an interview with the Financial Times, the Fed’s vice chairman of the board of governors, Stanley Fischer, said efforts on Capitol Hill to scuttle several areas of banking regulation are tantamount to “a terrible mistake.”
President Trump’s administration has been seeking a dismantling of some of the rules currently in place for banks and other financial institutions as part of Dodd-Frank and other post-financial crisis legislation. If repealed, these tenets would relax capital requirements and other mandates governing big banks' balance sheets, ostensibly freeing up lending activities.
Going back to pre-crisis status for banks?
“It took almost 80 years after 1930 to have another financial crisis that could have been of that magnitude. And now, after 10 years, everybody wants to go back to a status quo before the great financial crisis,” Fischer said, adding, “I find that really, extremely dangerous and extremely short-sighted.”
But, he also said that smaller banks should see some relaxation of regulations.
“The Congress is very involved in these things and the pressure is on how to ease up,” Fischer told the Financial Times. “The pressure to ease up on small banks is fine.”
India’s cybersecurity and regulatory progress
In India this past week, the upper house of the Parliament of India, the Rajya Sabha, passed a banking regulation bill which allows the banking authority, the Reserve Bank, to take action against those who default on large loans, the Hindustand Times reported. Union finance minister Arun Jaitley has said previous delays in legislation had hindered the banks’ efforts to help economic growth.
Also as pertains to India, the Economic Times of India reported that within the country, financial oversight has been busy within cybersecurity, an assessment from Deloitte that comes despite there being no high-level framework governing that very oversight.
Deloitte partner Shree Parthasarathy writes the country is “making leaps and bounds on the digital bandwagon” with businesses, and crime, that are becoming ever more digital. WannaCry malware serves as a call-to-action for the nation, according to the report.
The Economic Times also reported that against a backdrop of disparate security measures proposed and implemented by the country’s reserve bank, the regulatory development authority and the Security and Exchange Board of India (SEBI), more concrete standards may be in the offing, including cyber-attack response teams.