WASHINGTON (Reuters) – US President Donald Trump's top banking regulator will tell lawmakers on Tuesday that he wants more industry contributions to the stress tests and liquidity requirements for large and non-global lenders. .
Vice President of the Federal Reserve for Supervision Randal Quarles plays a key role in Trump's promise to stimulate economic growth by making regulations more flexible. crisis after the financial crisis, and their proposals will probably be questioned by Democratic lawmakers.
Quarles will appear before the House Financial Services Committee on Tuesday and the Senate Banking Committee on Thursday, giving lawmakers their first opportunity to question the Fed official since he took office in October.
But Quarles, a former Wall Street lawyer and US Treasury official UU., Probably will have a moderate tone, with the Fed looking to avoid political friction under the presidency of Jerome Powell.
Quarles will warn of the need to retain the key post-crisis reforms that have made the financial system safer, while arguing that some can be simplified without creating new risks, according to a written testimony presented Monday.
"We are aware that, just as there is a strong public interest in the security and soundness of the financial system, there is a strong public interest in the efficiency of the financial system," he said in the prepared comments.
So-called stress tests that analyze how a bank could cope with market crises should be published for public comment, Quarles said. Banks have complained for a long time that the tests are too opaque.
It will also propose to relax the liquidity requirements for large banks that are not global, as part of a broader effort to adapt the rules to the size of the companies and the risk profile.
During his six months in office, Quarles already proposed to soften other aspects of the annual bank stress tests and began work to simplify the so-called Volcker Rule that prohibits banks from conducting for-profit operations on their own.
Last week, the Fed also proposed to simplify the capital rules by making them more sensitive to the business models of the companies, a measure that could alleviate the capital charge for some banks.
Katanga Johnson report; Edition by Michelle Price and Meredith Mazzilli