WASHINGTON–A bank trade group is praising a decision requiring nonbank financial companies to better identify risks.
In a statement, Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey said, “ICBA applauds the Financial Stability Oversight Council’s unanimous votes to propose new interpretive guidance on nonbank financial company designations and an analytic framework for identifying potential risks to financial stability from certain activities.
“Large nonbank financial institutions that pose outsized risks to the financial system similar to those posed by large banks should be required to meet similar capital and liquidity standards,” Romero Rainey continued. “We support the publication of new guidance that will level the playing field, address risks to financial stability, and provide transparency to the public.”
Addressing ‘Systemic Risk’
The ICBA president noted the trade group has consistently supported enhanced capital, leverage, and liquidity standards for the largest bank and nonbank financial institutions, including a January letter in which it urged federal regulators to apply stricter regulatory standards on large regional banks to avoid government bailouts in the event of financial instability.
“ICBA looks forward to continuing to work with policymakers to address systemic risks and to ensure Washington’s response to the recent failures of large and risky financial institutions does not affect the community banks that continue to appropriately manage risk and do right by their customers,” Romero Rainey stated.
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