Travis Hillthe vice president of the Federal Deposit Insurance Corporation (FDIC), said in his memos that the FDIC needs a “new direction,” which is expected to be transitioned to at the beginning of President-elect Donald Trump’s second term.
Hill, who will take over as acting head of the office after Chairman Martin Gruenberg retires on January 19, but whose final appointment is still uncertain, explained in a speech to the American Bar Association that
regulators have gone too far wrong in overseeing the banking sector and their approach needs to change.
Among the specifics, he mentioned that American regulators may reconsider their proposals regarding the capital requirements of banks, which were submitted under the name “Basel III. endgame”. According to Hill, new ideas should involve minimal capital impact. According to him, they should also review existing capital requirements, such as the rules on the transfer of credit risk and leverage.
Hill also called for a more open attitude towards new technologies used by banks, including digital tools and fintech partnerships. For example, the FDIC’s practice of requiring banks to obtain individual approval before engaging in any blockchain-related activities is “harmful” and the regulator should focus on establishing clear standards for legally permissible activities, he said.
A day earlier, another supervisory aspirant close to Trump, Michelle Bowmanthe governor of the Federal Reserve, made similar comments. He indicated that he wishes to adopt less strict rules for banks. At the same time, he urged a more “pragmatic” approach between the banks and their supervisory bodies, instead of the “hostile” relationship observed today.
The cover image is an illustration. Cover image source: Getty Images
Source: www.portfolio.hu
