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"Even where regulatory frameworks try to place a lesser burden on smaller banks, there may be some risk of 'supervisory trickle down," said Fed. Gov. Daniel Tarullo.

Fed's Tarullo Calls for Second Look at Bank Regulations

Federal Reserve Board Gov. Daniel Tarullo endorsed dropping Basel II's internal ratings-based approach to risk-weighted capital requirements and specifically carving out exemptions for community banks from certain rules.

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