Fed reviews higher bank oversight thresholds

The U.S. Federal Reserve aims to raise the asset thresholds that subject banks to more stringent regulatory oversight, in an effort to reduce the constraints imposed on financial institutions whose assets surpass certain limits and to stimulate a new wave of mergers and acquisitions. The central bank plans to increase the upper limit of the threshold from $700 billion to around $1 trillion, while also raising some requirements at the $100 billion threshold to approximately $150 billion. This could give both large and small banks greater flexibility in growth and help reduce regulatory costs. This move comes at a time when some banks are calling for an update to standards that have not kept pace with economic growth and inflation, in order to boost economic activity and ease borrowing processes, amid concerns that increased concentration could reduce competition and heighten systemic risks in the long term.

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