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The
bank's collapse set off fears across the financial system, drove
an extraordinary government effort to reassure depositors and
backstop the system, and set off debate about reversing previous
rule easing for regional banks.
Now, a review of the $209 billion bank's failure being conducted
by Fed Vice Chair for Supervision Michael Barr could lead to
strengthened rules on banks in the $100 billion to $250 billion
range, the source told Reuters.
That review of Fed supervision and regulation of the bank will
be released by May 1, and augments a review of bank capital
rules by Barr already underway.
The Wall Street Journal reported on Tuesday the Fed was
reconsidering regulations regarding midsize banks, which could
lead to more stringent capital and liquidity requirements and
potentially beefed up annual "stress tests."
Currently, the toughest capital and liquidity requirements are
reserved for the nation's largest banks, after a 2018
deregulation law from Congress and Fed rule-making under prior
leadership eased those rules for smaller firms. Larger firms
also face more frequent and rigorous stress testing and
accounting requirements.
All those requirements could be reworked by the Fed in the
aftermath of the collapse, which has also spurred fresh calls
from proponents of tougher rules for regulators to rebuild those
restrictions.
On Tuesday, 50 Democratic lawmakers, including Senator Elizabeth
Warren, introduced a bill to repeal the law that eased rules for
banks in 2018.
(Reporting by Yana Gaur in Bengaluru and Pete Schroeder in
WashingtonEditing by Shri Navaratnam and Sam Holmes)
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