WASHINGTON–The Independent Community Bankers of America (ICBA) is reacting positively following remarks by Federal Reserve Vice Chair for Supervision Michael Barr on pending regulatory capital rules.
Specifically, Barr said new capital and debt requirements should apply to banks and bank holding companies with $100 billion or more in assets.
“ICBA and the nation’s community banks commend Vice Chair Barr for affirming that pending regulatory capital standards will target the largest and riskiest financial institutions, and we caution regulators to ensure new capital standards have no trickle-down effect on institutions below $100 billion in assets, including community banks,” said ICBA President and CEO Rebeca Romero Rainey.
“Barr’s remarks reflect previous statements from Federal Reserve Chairman Jerome Powell, Federal Deposit Insurance Corp. Chairman Martin Gruenberg, and Fed Governor Michelle Bowman that new regulatory capital standards should not affect community banks.
What Bank Failures Demonstrate
“As demonstrated by the recent failures of large, risky banks, including Silicon Valley Bank and Signature Bank of New York, community banks are different and operate under a vastly different model than these large financial institutions, and any regulatory reforms designed to rein in large bank risk should not be applied to community banks,” Romero Raney continued. “Policymakers should ensure that any changes to the capital framework are tailored to appropriately distinguish large banks that pose systemic risk to the financial system from the thousands of community banks that serve local consumers and small businesses.”
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