WASHINGTON – The Federal Reserve today released a final rule establishing risk-based capital surcharges for systemically important U.S. banks. The rule involved the most comprehensive systemic risk analysis ever conducted by financial regulators in the United States. After this thorough review, the data indicated that regional banks are not systemically risky and the Fed determined that no surcharge would apply to any U.S. regional bank.
In response, William Moore, the executive director of the Regional Bank Coalition, issued the following statement:
“The most important aspect of this rule is that it involved data driven determinations. Before any firm was subjected to a surcharge, the regulators conducted an assessment of the risks it presented. The findings announced today clearly demonstrate that regional banks involved in traditional banking do not present systemic risk. This rule represents the most conclusive evidence for what should be a now well-established fact: regional banks don’t pose a systemic risk to the economy, and regulating them as if they do only diverts regulators’ attention from actual threats and capital from loans that could be made to customers and small businesses across the country.
“Members of Congress from both parties have expressed support for legislation that will improve the economy by reforming the arbitrary rules that treat Main Street like Wall Street. We hope they will act.”
About the Regional Bank Coalition: The Regional Bank Coalition is a group of regional banks that support regulation based on risk and business model to ensure safety and soundness. For more information, visit www.regionalbanks.org or follow on Twitter @rgnlbanks.