The U.S. Treasury Department’s report, A Financial System that Creates Economic Opportunities: Banks and Credit Unions released in June 2017, set forth reforms for the banking sector that would help ensure the stability of the financial system and spur economic growth. The Committee on Capital Markets Regulation (“the Committee”) has prepared a two-year progress report on actions by the Congress and U.S. banking regulators, including the Federal Reserve Board, Office of the Comptroller of the Currency and Federal Deposit Insurance Company, to implement the U.S. Treasury Department’s recommendations.
The Committee finds that while the Congress and U.S. banking regulators have made meaningful progress, they still have significantly further to go to implement the U.S. Treasury Department’s recommendations.
The Committee’s staff identified 44 recommendations that would have a significant impact on U.S. banking regulation. We have listed those recommendations in the progress report, organized in the same manner as by the U.S. Treasury Department: A. Capital and Liquidity, B. Living Wills, C. Foreign Banking Organizations and D. Improving the Volcker Rule.
The Committee staff found that there has been: no proposal on 13 of the U.S. Treasury Department’s recommendations, proposed rulemakings on 22 of the recommendations, and legislative action or final rulemakings on 9 of the recommendations. Therefore, 35 out of the 44 key recommendations (or 79.5%) by the U.S. Treasury Department have not yet been finalized more than two years after the release of U.S. Treasury Department’s report on banks and credit unions.
Furthermore, we note that the finalized legislative and regulatory actions are primarily focused on tailoring existing rules to reduce the regulatory burden for smaller banks. There has been significantly less progress on the U.S. Treasury Department’s recommendations for the largest banking organizations, including increasing the transparency of bank stress tests and revising the Volcker Rule.
On pages two and three, we provide a brief status overview of the U.S. Treasury Department’s recommendations. A more detailed table including the U.S. Treasury Department’s recommendations and a summary of the relevant legislative or regulatory actions follows.
For the avoidance of doubt, the progress report is solely intended to assess the extent to which Congress and regulators have acted on the U.S. Treasury Department’s recommendations. It does not constitute an endorsement of the U.S. Treasury Department’s recommendations or each legislative or regulatory action taken.
Read the Committee’s full progress report here.