Federal Reserve Board ("FRB") Vice Chair for Supervision Randal K. Quarles outlined the agency's recent efforts to review and improve its regulatory framework now that implementation of major post-crisis reforms is largely complete.
In a speech before the 110th Annual Convention of the Utah Bankers Association, Mr. Quarles emphasized the importance of U.S. participation in the Financial Stability Board ("FSB"). He highlighted two supervisory improvements that the FSB and other agencies applied to reduce the regulatory burden on community and regional banks: (i) the FRB "Bank Exams Tailored to Risk" program and (ii) a joint action taken with other agencies to simplify the reporting responsibilities of smaller banks.
Mr. Quarles discussed the Economic Growth, Regulatory Relief and Consumer Protection Act (the "Act"), which was recently signed into law. According to Mr. Quarles, the Act retains the most important post-crisis reforms while directing the FRB to make necessary changes to reduce the regulatory burden on regional banks. Additionally, Mr. Quarles said that raising the asset threshold for bank holding companies that are eligible for the Small Bank Holding Company Policy Statement allows the FRB to "tailor its rules for these firms moving forward while retaining the ability to protect the safety and soundness of the system."
Mr. Quarles also underscored the importance of international regulatory communications, standard setting and assuming a comprehensive perspective on financial vulnerabilities when addressing global issues. Mr. Quarles argued that more accurate risk assessment in the broader financial system is integral to reducing the regulatory burden on community banks.
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