Forthcoming regulatory reforms -federal reserve

Randal Quarles, Federal Reserve Board Vice Chair for Supervision, outlines early observations for improving financial regulation.

Key points

  • 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.