Powell Defends Senate Bill FBO, Threshold Provisions
In this report, we assess FRB Chairman Powell’s appearance today before the Senate Banking Committee. With the Senate finreg legislation (see Client Report SIFI25) heading to the floor next week, supporters pushed the Chairman to rebut claims that the legislation benefits large foreign banks and eliminates key standards for banks between $100 billion and $250 billion. Despite Treasury Secretary Mnuchin suggesting that FBOs with U.S. operations under $250 billion will benefit from the legislation (see Client Report SIFI26), Mr. Powell said that the FRB will consider these banks’ global total consolidated assets when applying prudential requirements and that the bill does not mandate changes to IHC rules.