Fed’s Quarles touts controversial indicator for regional bank rule-making

23 July 2018 7:15am
Randal Quarles, the US Federal Reserve’s regulatory chief, suggested use of a controversial indicator of a firm’s vulnerability as the Fed weighs a basis for picking regional banks for heightened oversight under a new legislative mandate.

The indicator, a firm’s use of short-term wholesale funding, has been sharply criticized by banks in previous US and global standard-setting for giant international firms.

Quarles’s comments in a speech this week seem likely to put him at loggerheads with banks over how the Fed should implement recent Dodd-Frank rollbacks affecting about a dozen firms with between $100 billion and $250 billion in assets. Among these are BB&T, SunTrust and Fifth Third.