Banks poised for windfall as regulators move to ease rules
By Victoria Guida
Federal agencies are plotting a course to simplify rules imposed on banks since the financial crisis, a move that could result in a windfall for the lenders and more freedom to choose what to do with their newfound cash. Republicans and industry officials argue that the changes will boost economic growth by sparking more lending and expansion by banks. Progressive Democrats and consumer groups worry that the revisions may feed into a new crisis. …Karen Petrou, managing partner at Federal Financial Analytics, has used models to estimate the cumulative effect on banks of the simplification of capital and liquidity rules. “The real impact is as much as a 20 to 25 percent increase in balance sheet capacity,” she said. “They can make a lot more loans without clearly taking on any more risk.”