GOP senators pushed to keep banking rules loose one week before SVB collapse
https://www.yahoo.com/finance/news/g...152706948.html
The stunning events around Silicon Valley Bank of California and Signature Bank of New York come after years of moves in Washington to ease capital requirements on smaller and regional banks — including one that came just last week.
In a letter dated March 3 to Federal Reserve Chair Jerome Powell, Sen. Tim Scott (R-SC), the ranking member of the Senate Banking Committee, and nine of his GOP colleagues expressed concern that an ongoing Federal Reserve review may go beyond a 2018 law that eased regulations on smaller banks and “may unjustly increase capital requirements and have a chilling effect on market making activities and availability of financial services.”
The letter was timed to coincide with Powell’s testimony last week before Congress and referenced a 2022 speech from Michael Barr, the Fed’s vice chair for supervision, where he discussed the Fed taking a holistic review of capital standards.
The letter pushed back against ideas for increasing the buffer that banks are required to hold in reserve to guard against losses, arguing that banks “seem to have weathered the real-life stress test of the COVID-19 pandemic well.”
Within days, the banking sector saw the second- and third-largest bank failures in history.