For the US economy, the mid-sized regional banks play a much more important role than the big Wall Street banks.
(Photo: ddp/Vichie81)
Denver Joe Biden is in a hurry. The US President wants to regulate medium-sized banks more closely and surprisingly presented a number of demands on Thursday that the regulatory authorities should implement.
The Democrat wants to subject institutes with total assets of 100 to 250 billion dollars to annual stress tests. Their liquidity requirements are to increase and the interest rate risks on their balance sheets are to be reviewed.
The President’s message is clear: he wants to reverse the deregulation that took place under his predecessor Donald Trump. Trump had relaxed regulations for mid-sized institutions like Silicon Valley Bank (SVB), enabling the institution’s risky strategy that led to its collapse. Biden was vice president in 2009 with the clean-up work after the bankruptcy of Lehman Brothers and wants to prevent a new banking crisis at all costs.
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