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Congress Raising Bank Threshold Would Be a Positive Move

Tuesday, November 3, 2015

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Washington, D.C. – The House Financial Services Committee may vote soon on at least two proposals to change how banks with more than $50 billion in assets are regulated by the Federal Reserve, a move that would give bank regulators greater flexibility.

“We at the Bipartisan Policy Center were among the first to call for raising the so-called ‘bank SIFI’ threshold from $50 billion to $250 billion to better focus limited regulatory resources on the banks that are most likely to pose a threat to financial stability if they fail,” Justin Schardin, associate director of BPC’s Financial Regulatory Reform Initiative, said. “BPC also proposed giving regulators greater flexibility to tailor their approach to regulating the largest banks by focusing on how risky their activities and products are, not just on their size. The proposals that the committee is expected to consider take different approaches, but both recognize the logic that $50 billion isn’t the right threshold level, and that size isn’t everything,” he said.

“We continue to hope that the House and Senate can come together on a bipartisan package of improvements to the Dodd-Frank Act,” Schardin said. “Dodd-Frank made the U.S. financial regulatory system better in a number of important ways, but now that we’ve had more than five years since it was passed to see what is working and what isn’t, we also know it can be improved.”

Justin Schardin is available for comment.