Seeking Alpha

Tarullo suggests $100B, rather than $50B as SIFI line

  • There's little chance of any action this year, says Guggenheim's Jaret Seiberg, but Congress could have a look at raising the bar at which banks would be considered "systemically important" to $100B in assets from $50B. The idea comes after Fed Governor Daniel Tarullo - the point man at the central bank over bank regulation - in a speech this week suggested a SIFI designation may not be necessary for those lenders with $50B-$100B in assets.
  • Being branded a SIFI brings far stricter requirements such as drawing up "living wills" and submitting to the Fed's stress test and CCAR. "If the line were redrawn at a higher figure, we might explore simpler methods for promoting macroprudential aims with respect to banks above $10 billion in assets but below the new threshold," says the central planner from the Fed.
  • Making the move to $100B from $50B, says Guggenheim's Seiberg, might be even more likely should Ohio's Sherrod Brown become head of the Senate Banking Committee. A critic of the TBTFs, Brown has also complained about undue burdens being placed on regional lenders such as his home state's Huntington Bancshares (HBAN) and KeyCorp (KEY).
Comments (0)
Be the first to comment
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs