Fed unveils new capital regime to criticism from Brainard

US Federal Reserve building

Large US banks will be subject to new capital requirements based on their results from this year’s stress tests, the Federal Reserve announced on March 4.

The new regime “materially simplifies” the post-crisis capital framework, while maintaining banks’ capital levels, Fed vice-chair of supervision, Randal Quarles, said in the announcement.

But a senior Fed official, Lael Brainard, released a statement that strongly criticised the new regime. She argued it gave banks a “green light” to reduce

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