The Fed may tighten requirements on medium-sized banks after the collapse of SVB – media
The U.S. Federal Reserve is considering toughening requirements for mid-sized banks like Silicon Valley Bank, which unexpectedly went bankrupt last week.
It is reported Reuters with reference to informed interlocutors.
The collapse of the bank raised fears throughout the financial system and prompted the government to take measures to reassure depositors and support the system. Also, the bankruptcy of SVB has caused a debate about the abolition of the previous easing of rules for regional banks.
An investigation into the bankruptcy of the $209 billion-asset bank could lead to tougher rules for banks with assets between $100 billion and $250 billion. The relevant review of the Fed will be published by May 1.
Earlier, another publication, the Wall Street Journal, reported that the Fed was reviewing rules for medium-sized banks, which could lead to tighter capital and liquidity requirements, as well as potential strengthening of annual “stress tests.”
Currently, the toughest capital and liquidity requirements apply to the nation’s largest banks, after a deregulation law passed by Congress in 2018 eased those rules for smaller financial institutions. Larger companies also face more frequent and stricter stress testing and accounting requirements.
All of these requirements may be revised by the Fed after the bank collapse, which has also sparked renewed calls from advocates of tougher rules for regulators to restore these restrictions.