Key points from the Fed’s bank regulation tailoring proposal

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On October 31st, the Federal Reserve (Fed) released for public comment a new framework to tailor certain capital, liquidity, and stress testing requirements for US banks based on their size, interconnectedness, and risk profiles. The proposal was developed in response to the Dodd-Frank relief law, which raised the asset threshold for a bank to be deemed systemically important, and therefore subject to enhanced requirements, from $50 billion to $250 billion and called on the Fed to develop a new regulatory framework for banks with between $100 billion and $250 billion. However, the Fed went beyond the statutory requirement and also provided substantial relief to US banks between $250 billion and $700 billion in assets – a huge win for the largest domestic banks. 

This First take highlights five key points from the Fed’s bank regulation tailoring proposal:

  1. Size doesn’t really matter
  2. Custody banks get no relief
  3. Status quo for US GSIBs
  4. FBOs to get their own proposal
  5. More to come

First take

A publication of PwC's financial services regulatory practice.

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Julien Courbe

Financial Services Leader, PwC US

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