Federal Reserve to match regs to bank risk profiles

The Federal Reserve Board has finalized rules that tailor its regulations for domestic and foreign banks to more closely match their risk profiles. The rules reduce compliance requirements for firms with less risk while maintaining the most stringent requirements for the largest and most complex banks. The rules also establish a framework that sorts banks with $100 billion or more in total assets into four different categories based on several factors, including asset size, cross-jurisdictional activity, reliance on short-term wholesale funding, nonbank assets, and off-balance sheet exposure. Significant levels of these factors result in risk and complexity to a bank and can in turn bring risk to the financial system and broader economy.

• Press release
• Tailoring rule #1
• Tailoring rule #2
• Chart illustrating the rules
• Related fee proposal

These rules will become effective 60 days after Federal Register publication.