In this report, we assess FRB Chairman Powell’s appearance today before the Senate Banking Committee. Although much of it covered wage growth and Trump trade policies, Ranking Member Brown (D-OH) pressed Mr. Powell on whether FBOs with over $50 billion in U.S. assets will get relief under the new finreg law. Mr. Powell indicated that the $50 billion IHC thresholds (see FSM Report FBO3) will not be changed; questioning then did not extend to other FBO reforms recently outlined by Vice Chairman Quarles (who coincidentally today won confirmation for a full fourteen-year Fed term). While Chairman Crapo (R-ID) pushed for immediate relief for banks between $100 billion and $250 billion, Sen. Warner (D-VA) said that the FRB should closely review the potential risks from particular banks in this range prior to granting relief. Mr. Powell stressed that the FRB plans to implement the law as quickly as possible, indicating also that the FRB will release a framework on evaluating the risks posed by these banks for comment.
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