SIFIs

The Federal Reserve released the final version of its total loss absorbing capacity rule – one of the final elements of the post-crisis regulatory framework meant to provide a means of recapitalizing a failed megabank.

Federal Reserve Chair Janet Yellen said she is advising the incoming Trump administration not to roll back the improvements in bank safety and soundness enshrined in Dodd-Frank, but acknowledged that recent scandals “certainly suggest there is room for improvement” when it comes to bank culture.

After Wells Fargo became the first U.S. bank ever sanctioned over its resolution plan, observers are wondering what it means for the future of the institution and the living will process.

Of the five banks that failed their living will tests earlier this year and were forced to resubmit plans, only Wells Fargo failed again, resulting in immediate regulatory action that will restrict its growth, including its ability to expand internationally and buy nonbank subsidiaries.

Industry observers worry that the Dodd-Frank Act's Title II — which gives the Federal Deposit Insurance Corp. authority to oversee the resolution of a complex financial institution — could be the first thing under fire when the Trump administration undertakes financial reform.

WASHINGTON — The Federal Reserve Board is slated to vote next week on a final rule meant to help regulators recapitalize a major U.S. bank if it should run aground, one of the last significant capital regulations that the agencies have yet to complete.

The bank must make fundamental changes to avoid becoming the ultimate scapegoat for grievances about Wall Street's biggest banks.

And that was only the beginning. Bank CEOs speaking in New York provided a long list of financial reforms that they would like to see under the incoming Trump administration.

Rather than address systemic risk with impractical capital requirements, regulators can make a few subtle changes that will force the shrinkage of the largest banks gradually over time.

In a wide-ranging interview with American Banker, Cleveland Fed President Loretta Mester talks about what should be kept in the push to deregulate banking regulation, as well as her view on reforming the Fed, ending "too big to fail," the future of Basel and the effect of a Trump administration on financial services.