To illustrate this point, a colleague and I at the FDIC have constructed the Global Capital Index, which shows the tangible capital levels for each of the largest global banking firms and the average levels for different size groups of US banks. – Thomas M. Hoenig, Vice Chairman of FDIC, from A Conversation about Regulatory Relief and the Community Bank
On April 15th Hoenig revealed that the Dodd-Frank Act is a burden that might not be necessary for banks that did not and cannot cause a crash like that of 2008 Financial Crisis. He’s leading FDIC’s effort to propose regulatory relief to banks that:
- banks that hold, effectively, zero trading assets or liabilities;
- banks that hold no derivative positions other than interest rate swaps and foreign exchange derivatives; and
- banks whose total notional value of all their derivatives exposures – including cleared and non-cleared derivatives – is less than $3 billion.
Effectively, community banks are the only institutions that apply. (Credit Unions are not insured by the FDIC and are insured by the National Credit Union Administration (NCUS)).
For the whole text of the Hoenig’s speech outlining the regulatory relief proposal, go to this link.
About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses. He is the author of the forthcoming book History of Money Laundering: How Criminals Got Paid And Got Away.