Randal Quarles, Federal Reserve Board Vice Chair for Supervision, outlines early observations for improving financial regulation.
Post-crisis core reforms, including capital, liquidity, stress testing, and resolution, should be preserved but re-assessed based on experience since implementation.
Assessments should consider the effectiveness of the regulations as well as identify improvements based on the principles of efficiency, transparency, and simplicity.
Change is currently underway in the areas of: small bank capital, resolution planning, stress testing, the leverage ratio, and the Volcker Rule.
Emerging points of focus include further tailoring of supervision and regulation, refining the “advanced approaches” thresholds, simplifying the loss absorbency framework, and enhancing stress testing disclosures.