In this report, we provide our initial analysis of the paper Treasury released yesterday evening that begins this Administration’s financial-reform policy statements and thereafter its actions to implement the President’s orders. As anticipated, this initial report focuses on banking, providing a far more detailed assessment of actions regulators could take on their own and in some cases also of legislation Treasury seeks to increase bank lending capacity and market liquidity, supporting aspects of H.R. 10 (see FSM Report REFORM137). Treasury here agrees with the need for an off-ramp for banks that hold leverage capital in amounts perhaps equal to the House bill’s ten percent ratio, but Treasury also recommends preserving risk-based capital standards and adjusting the prudential ones wholly exempted by the Hensarling off-ramp, making it unclear where the Administration in fact lands on the balance between different types of capital standards and regulatory relief.
The full report is available to retainer clients. To find out how you can sign up for the service, click here.