SIFIs

The agencies proposed changes to the way they apply a capital backstop to the largest systemically important firms, replacing a static leverage ratio with a more dynamic ratio that takes each bank’s risk profile into account.

The Treasury secretary has suggested raising an asset cutoff used by the Financial Stability Oversight Council to assess systemically significant nonbanks, removing some hedge funds and other risky firms from the council's purview.

With the largest banks remaining profitable and globally competitive, Federal Reserve Chairman Jerome Powell said he has not yet heard a compelling case for giving them substantial regulatory relief.

Several states have created their own operations aimed at shoring up what they see as oversight holes created by the CFPB; JPMorgan CEO’s annual letter (47 pages, this one) runs the gamut.

The Financial Stability Oversight Council will hold an executive session next week to consider whether Zions Bancorp. should still be considered a systemically important financial institution.

On quarterly earnings calls set to begin next week, investors will be listening closely to CEO comments for any hints of how banks might deploy excess capital if they are no longer deemed systemically important.

The biggest legacy of the current regulatory relief effort may be the increasing focus on whether organizing banks in supervisory buckets by asset size makes sense. Yet the bill deals with just one of the two big asset thresholds in the law.

The regulatory relief bill frees some regional banks from the tough supervision reserved for larger companies, but regulators still can subject them to onerous requirements.

While regulatory relief legislation would raise the asset threshold for “systemically important” banks, Federal Reserve Chairman Jerome Powell said the central bank could still apply prudential scrutiny to banks below that new cutoff.

A day after the Senate passed regulatory relief, top House Republicans vowed to have a big say in the final version before the bill heads to the White House. That raised fresh questions about how quickly the Dodd-Frank reforms will become law.