In his first of two days before Congress, FRB Vice Chairman Quarles today appeared before the House Financial Services Committee in an unusually substantive and policy-setting session.  In this report, we detail the areas in which Mr. Quarles broke new ground – most notably with regard to stress testing, liquidity regulation, TBTF, the GSIB surcharge, and CRA, noting also the many other issues on which new positions were laid out.  These included criticism from GOP leadership not so much of the FRB’s pending rewrite of board responsibilities (see FSM Report CORPGOV23), but of what the Members termed the Fed’s already over-heavy hand sitting in on board meetings and forcing directors to resign.  This view is of course directly opposed to Sen. Warren’s (D-MA) views in the Wells case as well as the Board’s enforcement action (see Client Report CORPGOV26) shortly before Chair Yellen left the Fed.  As this report details, Mr. Quarles clearly has a far-reaching reform agenda, approving for example of the Treasury proposal to confine the toughest LCR only to GSIBs (see Client Report LIQUIDITY30). 

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