Fed Considers Raising Asset Thresholds for Stricter Bank Oversight

The U.S. Federal Reserve is considering raising the asset thresholds that trigger stricter oversight of large banks, according to people familiar with the matter cited by Reuters.

The U.S. Federal Reserve is considering changes to asset thresholds that determine when banks face additional regulatory requirements.

The central bank is expected to consider reindexing the thresholds at which banks become subject to more stringent requirements, including stress testing, liquidity and capital rules, to account for inflation and economic growth.

Under current rules, additional requirements apply as banks reach $100 billion, $250 billion and $700 billion in assets.

The thresholds were established in 2019.

People familiar with the discussions said the Fed could consider moving some thresholds higher, including potentially raising the highest threshold closer to $1 trillion and a lower threshold closer to $150 billion.

Banks have argued that crossing the thresholds can require significant additional spending on compliance, risk-management systems, stress testing and regulatory reporting.

Any changes would still have to go through the Federal Reserve's formal regulatory process before taking effect.