Banking regulators should ensure changes to the regulatory framework do not harm the long-term viability of banks, especially midsized and smaller banks, Federal Reserve Governor Michelle Bowman said.
Regulatory Risks: Speaking in Morocco, Bowman said regulatory reform can pose significant financial stability risks, particularly if changes fail to account for incentive effects and potential consequences. She said regulatory actions can depress economic activity by reducing the availability of credit, citing the potential impact of regulators’ Basel III Endgame proposal.
ICBA Advocacy: ICBA has commended regulators for targeting proposed capital and debt requirements to institutions over $100 billion in assets while calling on policymakers to continue to distinguish large banks from community banks.