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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Fed eases post-crisis rules for domestic, foreign banks

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WASHINGTON: The US Federal Reserve on Thursday unveiled a final package of rules easing capital and liquidity requirements for domestic US and foreign banks that were originally introduced following the 2007-2009 global financial crisis.


The changes, which should reduce the compliance burden and free up funds for US Bancorp, Capital One and PNC Financial, among others, mark another win for the industry after the Fed also relaxed rules on derivatives trades and banks’ annual health checks.


Thursday’s package stems from bipartisan legislation passed by Congress in May 2018 that rewrote parts of the 2010 Dodd-Frank financial reform law.


That 2018 law ordered the Fed to reduce the burden on community and regional lenders, but progressive Democrats and consumer groups are likely to criticise the central bank for giving larger banks too much leeway with its final changes.


Randal Quarles, the Fed’s top regulatory official, said the package allows the Fed to more closely tie stricter rules to risks and retains the toughest requirements for the largest firms.


But Governor Lael Brainard voted against the easier rules, saying in a statement they go beyond the law passed by Congress and would “weaken the safeguards at the core of the system before they have been tested.” Brainard has regularly opposed recent efforts at the Fed to ease bank rules. The Fed on Thursday said the changes, which it first proposed in October last year, aim to more closely tailor regulations to the riskiness of firms’ businesses. — Reuters


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