In this report, we assess FRB Vice Chairman for Supervision Quarles appearance before Senate Banking today. Chairman Crapo (R-ID) again urged prompt EGRRCPA implementation and Ranking Member Brown (D-OH) renewed his criticism of various FRB proposals, adding now to them an attack on the FRB and interagency tailoring proposals (see FSM Reports SIFI30 and SIFI31). The questioning was similar to yesterday’s hearing (see Client Report REFORM154), with Mr. Quarles now also reiterating prior Fed commitments shortly to issue the community bank leverage ratio required by EGRRCPA (see FSM Report LEVERAGE14), and make resolution framework changes, turning after these NPRs also to FBO tailoring. Sen. Corker (R-TN) rebuked the FRB for not pushing FSOC to designate the GSEs as systemically important, but Mr. Quarles called this only a piecemeal solution compared to a comprehensive solution from Treasury and FHFA.
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