Washington, D.C. — Today, the Federal Reserve Board of Governors finalized a package of rollbacks to post-crisis financial regulations for the largest domestic and foreign banks in the country. In response, Gregg Gelzinis, policy analyst for Economic Policy at the Center for American Progress, released the following statement:
Today, the Federal Reserve eroded several critical banking protections put in place following the 2007-2008 financial crisis, further putting the economy at risk. The final rule threatens the safety and soundness of the banking system from multiple angles. Reducing the stringency of bank capital requirements, liquidity rules, and stress testing makes large bank failures more likely—while watering down living wills requirements magnifies the economic devastation caused by such failures.
The beneficiaries of these rollbacks are not small firms. Domestic regional banks, the U.S. operations of foreign megabanks, and even Wall Street banks all enjoy various levels of deregulation in this package. Unfortunately, these rollbacks constitute only one portion of President Donald Trump’s toxic financial deregulatory agenda that imperils the U.S. economy. The rollbacks could not come at a worse time, as threats to the economic expansion are increasing.
When unchecked risk-taking leads to instability in the financial system, the pain will be felt by working families and taxpayers.
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