The U.S. Federal Reserve is to begin conducting supervisory stress tests this fall for 19 large bank holding companies
Amar Bidhé, Thomas Schmidheiny Professor at the Fletcher School/Tufts University, says that regulatory changes enacted following the 2008 financial crisis haven’t addressed defects in the financial system. He says banking regulators should replace abstruse rules with a system of “case by case” regulation. He spoke at the IIAC Conference at the MaRS Discovery District in Toronto.
Lack of progress points to weaknesses in business models and underlying profitability
Bankers need to have the same high professional standards as doctors and solicitors
Beyond a certain point, large capital accumulations may hinder economic growth
Revisions intended to close gaps, eliminate “blind spots”
Report shows progress made from June 2011
Bank’s reluctance to sell non-traditional mortgages will reduce availability of credit to many borrowers
Core principles for effective banking supervision endorsed by global bank supervisors
Approval would allow mortgage lender to broaden its product line into other forms of consumer lending and related services