Featured Product

    Randal K. Quarles of FED Speaks on Improving Post-Crisis Regulations

    January 19, 2018

    Randal K. Quarles, the FED Vice Chairman for Supervision, spoke at the American Bar Association Banking Law Committee Annual Meeting. He talked about evaluating and improving the post-crisis regulatory regime and outlined the emerging focus areas. He discussed the efficiency, transparency, and simplicity of regulation; common ground areas of improvement; and emerging areas of review of regulations.

    Mr. Quarles stated that there is an opportunity to improve the efficiency, transparency, and simplicity of regulations. By efficiency, he meant the degree to which the net cost of regulation is outweighed by the benefits of the regulation. He explained that transparency is an objective that ought to particularly resonate with this audience. There are valuable, practical benefits to transparency around rule making; even good ideas can improve as a result of exposure to a variety of perspectives. He added that simplicity of regulation is a principle that promotes public understanding of regulation, promotes meaningful compliance (by the industry) with regulation, and reduces unexpected negative synergies among regulations. Next, he discussed the common ground areas of improving the cost-benefit balance of post-crisis regulation. He stated that the proposed changes to the capital rules for smaller firms is a positive step toward meaningful burden relief for smaller banks. He also emphasized his belief in the benefits of continued improvements in the resolution planning process, in light of the substantial progress made by firms over the past few years; this progress includes a permanent extension of submission cycles from annual to once every two years and reduced burden for banking firms with less significant systemic footprints. He also mentioned the leverage ratio re-calibration and the proposal to streamline the Volcker rule.

    While mentioning the ongoing comprehensive regulatory review in the core areas of reform—namely capital, stress testing, liquidity, and resolution—he said that “The objective is to consider the effect of those regulatory frameworks on resiliency and resolvability of the financial system, on credit availability and economic growth, and more broadly to evaluate their costs and benefits.” Mr. Quarles mentioned that he has formed views on a few areas that warrant more focus. These areas include the issue of tailoring supervision and regulation to the size, systemic footprint, risk profile, and business model of banking firms. It also includes advanced approaches thresholds that identify internationally active banks. These thresholds are significant not only for identifying which banking firms are subject to the advanced approaches risk-based capital requirements, but also for identifying which firms are subject to various other Basel Committee standards, such as the supplementary leverage ratio, the countercyclical capital buffer, and the liquidity coverage ratio. The third area is the simplification of the framework of loss-absorbency requirements. He concluded “... that these remarks give you a sense of our approach to analyzing and improving post-crisis regulation. As I mentioned earlier, the areas of core reform—capital, liquidity, stress testing, and resolution—have produced a stronger and more resilient system and should be preserved. We have made great progress, but there is further work to do....”

     

    Related Link: Speech

    Keywords: Americas, US, Banking, Stress Testing, Loss Absorbency, Proportionality, Resolution Planning, Basel III, FED

    Featured Experts
    Related Articles
    News

    BIS and Central Banks Experiment with GenAI to Assess Climate Risks

    A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe

    March 20, 2024 WebPage Regulatory News
    News

    Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures

    Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.

    March 18, 2024 WebPage Regulatory News
    News

    Singapore to Mandate Climate Disclosures from FY2025

    Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies

    March 18, 2024 WebPage Regulatory News
    News

    SEC Finalizes Climate-Related Disclosures Rule

    The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.

    March 07, 2024 WebPage Regulatory News
    News

    EBA Proposes Standards Related to Standardized Credit Risk Approach

    The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU

    March 05, 2024 WebPage Regulatory News
    News

    US Regulators Release Stress Test Scenarios for Banks

    The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

    February 28, 2024 WebPage Regulatory News
    News

    Asian Governments Aim for Interoperability in AI Governance Frameworks

    The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.

    February 28, 2024 WebPage Regulatory News
    News

    EBA Proposes Operational Risk Standards Under Final Basel III Package

    The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.

    February 26, 2024 WebPage Regulatory News
    News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News
    News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News
    RESULTS 1 - 10 OF 8957