Fed plan doesn't go far enough to ease liquidity, stress-test standards, banks say

30 January 2019 7:14pm
A US Federal Reserve proposal to relax liquidity and stress-test requirements for regional banks doesn’t go far enough, financial institutions said.

Three regional banks asked that asset and risk thresholds be indexed to annual industry or economic growth, which could let many mid-size banks remain for years in a category that offers relief from current standards.

The proposed cutoffs “should be indexed to the growth of the US banking industry in order to preserve the relative relationship between these thresholds and the size of the banking industry overall,” said Capital One, PNC and US Bancorp, all large regional banks.

The Bank Policy Institute, whose board members include the heads of JPMorgan Chase, Bank of America and Citigroup, as well as several mid-size bank chairmen, made a similar request in a letter to the Fed last week.