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'White House Calls for Tougher Midsize Bank Rules; White House Plan Doesn't Include Legislative Proposals; Plan Comes As Banking Regulators Consider Tougher Rules For Midsize Banks; Endorses Stricter Rules For Banks With More Than $100B In Assets' - WSJ

Author: Happy Mohamed | March 30, 2023 01:49pm

https://www.wsj.com/articles/white-house-calls-for-tougher-midsize-bank-rules-ca33211f

The White House on Thursday called for tougher rules for midsize banks after the collapse of two lenders earlier this month sent tremors through the banking system.

The recommendations call for new rules from the Federal Reserve and other banking regulators that would apply to banks with $100 billion to $250 billion in assets. There were approximately 20 firms in that asset range as of the end of 2022, according to the Federal Financial Institutions Examination Council. 

The Fed is already rethinking a number of its rules related to those banks after Silicon Valley Bank and Signature Bank failed. Changes could include tougher capital and liquidity requirements, as well as steps to strengthen stress tests that assess banks’ ability to weather a hypothetical severe downturn. 

Thursday’s White House proposal includes provisions that can be taken under existing law. None of the recommendations would require congressional action. The administration is also pressing regulators to complete unfinished rules from the 2010 Dodd-Frank financial law, specifically a provision designed to curb compensation packages that could encourage excessive risk taking.

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