![]() Raskin would likely have to be in place before the Fed could sign off on the changes. The Fed, which shares responsibility for writing the rules with other bank regulators, hopes the CRA can be updated to reflect the growth in online banking, while still ensuring lenders make meaningful contributions to the poorer areas they serve. The central bank will also play a key role in a long-awaited overhaul of the Community Reinvestment Act (CRA) rules which promote lending in lower-income communities. The Fed has yet to publish a proposal, leaving the job up to Raskin. The Fed had to temporarily ease that rule in the midst of the pandemic as a glut of bank deposits and Treasury bonds drove up capital requirements on what are viewed as safe assets.ĭespite intense bank lobbying, the Fed let that relief expire last year but promised to review the overall rule. read more SUPPLEMENTARY LEVERAGE RATIOĪnother issue on the table is the supplementary leverage ratio, a rule created after the decade-ago crisis requiring banks to hold capital against assets regardless of their risk. The controversy over Raskin's role in helping fintech Reserve Trust gain access to a key Fed service could also complicate that process. The familiar controversy as to how and by whom bank-deposits are. But as the sector continues to balloon, the Fed is expected to act. Yesha Yadav, Sarah Bloom Raskin, Mehrsa Baradaran, Christopher Giancarlo. While other banking regulators have worked for years to bring fintechs under their regulatory umbrella, the Fed has resisted, fearing doing so could create systemic risks. ![]() Fintechs are also lobbying the Fed for access to its payments system. The Fed is exploring how banks intersect with fintechs, particularly with smaller lenders that may outsource more services and infrastructure. She will also have to tackle a regulatory blueprint for "fintech" companies that are quickly chipping away at the traditional financial sector. Without that certainty, bankers and lawyers have said they would be reluctant to pursue new tie-ups. Raskin is expected to lead the committee that scrutinizes potential tie-ups, suggesting any new merger policy may also need her backing. Some pending deals were approved following Fed Chair Jerome Powell's renomination, but the industry is still waiting for the Fed and the Justice Department to decide on a potential new policy for bank deals. The delay in nominating Raskin may compound a logjam in approving bank tie-ups that had slowed during the past six months due to uncertainty over Fed personnel changes. ![]()
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