Hoenig Adds Sweetener to Reg Relief Plan
By Ian McKendry

The push to exempt small banks from certain tougher regulatory requirements in return for facing higher overall capital standards continues to gain ground. Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig on Tuesday reiterated his plan for banks that stick to “traditional” banking models and maintain high capital ratios to receive eased regulatory requirements, but added a sweetener to the mix. Karen Shaw Petrou, managing partner of Federal Financial Analytics, noted that “in the past he has said that the Volcker Rule should remain in place.” “I think he is liberalizing that by saying unlike others who think the Volcker Rule should simply be waived, he is saying he wants it in place, but easier to comply with,” Petrou said. Hoenig first released details of his plan in April, under which “traditional” banks would face a lighter compliance regime, including exemptions from the complex Basel III capital rules.