In the wake of high-profile bank failures, the White House is calling on financial regulators to reverse rules established during the last administration that eased capital and stress testing requirements for midsize banks.
The failure this month of Silicon Valley Bank of Santa Clara, Calif., and Signature Bank of New York City has sparked a debate in Washington over whether policy changes contributed to the collapses and over proposals to prevent a repeat. The White House on Thursday outlined regulatory changes that would toughen requirements and oversight of midsize banks without relying on Congress to take action.
“The president believes that the weakening of commonsense bank safeguards and supervision during the Trump administration for large, regional banks should be reversed in order to strengthen the banking system and protect American jobs and small businesses,” a White House official said on a press call. The official spoke anonymously as a condition of the call.
Unlike earlier policy changes called for by President Joe Biden, including fining and confiscating the pay of executives at failed banks, the proposals outlined by the White House wouldn’t require action by Congress. The decisions would be made by independent banking regulators.
The White House asked the regulators to unwind the regulatory rollbacks undertaken during the Trump administration that eased capital requirements, reduced stress testing and eliminated the need to establish “living wills” for banks with $100 billion to $250 billion in assets.
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