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Regulators Ease Bank Rules for Growth, Citing Innovation
4 Jun
Summary
- Bank regulators will testify to Congress on Thursday about easing rules.
- Efforts aim to boost economic activity and innovation without new risk.
- Supervision will focus on material financial risks, not procedural gaps.
On Thursday, leading U.S. bank regulators are scheduled to appear before the House Financial Services Committee to discuss a significant effort to revise and soften regulations enacted after the 2008 financial crisis. They plan to convey to lawmakers that these changes are intended to foster economic activity and innovation without introducing excessive risks to the financial system.
Federal Reserve Vice Chair for Supervision Michelle Bowman stated that by tailoring requirements to actual risk and focusing supervision on crucial matters, the Fed is creating conditions for banks to succeed while upholding strong safeguards. FDIC Chairman Travis Hill added that supervision is being reformed to concentrate on material financial risks rather than mere procedural compliance.
The regulators also intend to signal their support for responsible innovation within the financial sector, including the adoption of technologies like blockchain and artificial intelligence by both banks and nonbank entities. Comptroller Jonathan Gould emphasized that their role is to facilitate, not hinder, such advancements, while also acknowledging the potential risks posed by new technologies.
