How Some Small Banks Are Finring the Fed
By Christina Rexrode
The Little Rock, Ark., bank was regulated by the Federal Reserve, the Federal Deposit Insurance Corp., a state banking agency and others. It figured one way to reduce expenses would be to remove a layer of oversight. So, the bank in June shed its holding-company structure, an umbrella corporation regulated by the Fed. With that gone, the Fed was out of the picture….
Bank of the Ozarks and other firms counter by saying the FDIC isn’t a lenient regulator. The FDIC and Federal Reserve don’t have an official position on holding-company changes. “It might be arbitrage,” Karen Shaw Petrou, managing partner of policy-analysis firm Federal Financial Analytics Inc., said of banks changing their structure. “But it’s also a huge boost to their challenged earnings.”