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News Release: Fed Deregulation Of Bank Capital Distributions Increases Risks To The Public

Submitted by on March 7, 2019 – 4:49 pm

FOR IMMEDIATE RELEASE

Mar. 7, 2019

CONTACT:

Carter Dougherty, carter@ourfinancialsecurity.org, (202) 251-6700

Fed Easing Of Stress Tests Increases Risks To The Public

Statement from Marcus Stanley, policy director at Americans for Financial Reform:

“The Federal Reserve announced yesterday that they will eliminate qualitative objections to bank capital distributions under their stress test process. That means that banks would be able to hand out capital to their shareholders instead of reserving it against losses, even if banking supervisors find that shortcomings in their risk management and data systems pose a danger to the soundness of the bank.

“This decision increases risks to the public. It is just one of numerous current and proposed deregulatory changes, to both the stress tests and other prudential requirements, which are currently in process at banking regulators.”

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