WASHINGTON–With the banking industry pushing back on proposals that would raise capital standards for banks in the wake of a number of failures, one trade group is praising a Federal Reserve governor for saying any such regulation should be targeted.
Gov. Michelle Bowman offered such a view during recent remarks before a meeting in Salzburg, Austria, when she expressed concerns that applying new regulatory reforms to institutions under $100 billion in assets would shield the largest banks from facing new competition, lead to further bank consolidation, harm the nation’s tiered banking system, and officially designate a handful of banks as too big to fail.
A Need for Targeting
“(The Independent Community Bankers of America) and the nation’s community banks commend Governor Bowman for calling on policymakers to ensure any new regulatory capital standards target the largest and riskiest financial institutions,” said ICBA President and CEO Rebeca Romero Rainey. “Governor Bowman’s remarks help demonstrate why federal regulators, including Federal Reserve Chairman Jerome Powell, Federal Deposit Insurance Corp. Chairman Martin Gruenberg, and Fed Vice Chair for Supervision Michael Barr have said — including in congressional testimony — that new regulatory capital standards will target banks with more than $100 billion in assets and will not affect community banks.”
‘Vastly Different Model’
Romero Rainey said the recent failures of Silicon Valley Bank and Signature Bank of New York demonstrate that community banks operate a vastly different model than large financial institutions, and any regulatory reforms designed to rein in large bank risk should not be applied to community banks.
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