Following its recent proposals to alter the way large BHCs are rated for supervisory purposes and how boards of directors are held to account, the Federal Reserve has issued a proposed new approach to handling material examination disputes that would be applicable across the Federal Reserve System. Although seemingly a minor issue, revisions to the supervisory framework have competitiveness and cost consequences due to the burden banks now believe reduces effectiveness and efficiency. Greater transparency would also increase the odds of successful M&A, with many transactions now stalled due to lengthy supervisory disputes.
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