A bank's responsibility to depositors and creditors cannot be measured simply by the number of regulatory hurdles it faces. The Federal Reserve's February 3 final rule offered qualifying large and noncomplex firms relief from qualitative objections in annual capital-plan review. Its scheduled March 6 start remained future on February 5; the change was specific, not an end to oversight. [2017-02257][2016-23629]

The September proposal helps explain that specificity. It retained quantitative assessment under Comprehensive Capital Analysis and Review while directing qualitative assessment into the supervisory process. The final text preserves the Federal Reserve's supervisory and enforcement powers. An ethical reading can recognize the value of proportionate procedures without treating reduced procedural burden as proof that financial stewardship has improved. [2017-02257][2016-23629]

Even the category receiving relief requires care. The final definition looks to the preceding December 31 and combines average consolidated assets below $250 billion, defined average nonbank assets below $75 billion and the absence of a U.S. global systemically important bank designation. The proposal had used a foreign-exposure test below $10 billion instead. Neither version supplies a moral ranking of institutions or their customers. [2017-02257][2016-23629]

Our judgment is that accountability requires explaining what remains as clearly as what disappears. Ordinary applicability and continuing applicability have their own rules, including Board orders and four consecutive below-threshold quarterly reports for the latter. A single smaller balance is no shortcut out. These safeguards describe the design; whether the revised arrangement serves people well remains a question for evidence, not reassurance based on a label. [2017-02257][2016-23629]

Source documents

  1. Amendments to the Capital Plan and Stress Test Rules; Regulations Y and YYhttps://www.govinfo.gov/content/pkg/FR-2017-02-03/html/2017-02257.htm
  2. Amendments to the Capital Plan and Stress Test Ruleshttps://www.govinfo.gov/content/pkg/FR-2016-09-30/html/2016-23629.htm