Federal Reserve Regulatory Vice Chairman Bauman: Plans to reform and relax banking regulation

According to Golden Finance, on Friday, the newly appointed top regulatory official of the Federal Reserve, Bauman, set an ambitious agenda aimed at re examining and relaxing multiple banking rules and regulatory policies that she believes have become too burdensome and unnecessary. Bauman stated that the Federal Reserve will reconsider its approach to rule making and how it regulates some of the largest and most complex banks in the United States. She pointed out that the numerous rules introduced since the 2008 financial crisis deserve reconsideration. Bauman specifically pointed out that the Federal Reserve will consider modifying its ratings of large banks, and pointed out that two-thirds of large banks are still rated as unsatisfactory by Federal Reserve regulators even if they meet all capital and liquidity requirements. She stated that the proposed reforms will address this strange mismatch by adopting a more rational approach, namely reducing the subjective rating weights of banks that have already demonstrated resilience. She also stated that the Federal Reserve will reconsider its rating framework for small banks to ensure that it primarily focuses on major risks rather than regulatory judgments. Bauman also stated that the Federal Reserve will rigorously review the so-called 'horizontal review', which refers to regulatory agencies conducting in-depth reviews of multiple banks on a specific issue. She believes that this approach actually leads to competition among banks and ignores their respective uniqueness when identifying defects.