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Lending / The Ticker

Banks question what the end picture looks like

New regulations spark all of the analysis

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According to an article in The Wall Street Journal, as U.S. bank regulators continue to push more regulations on lenders, banks are starting to question what the end picture is supposed to look like.    

While regulators and politicians continue to work to make the financial system safer and end the threat of too-big-to-fail, they have failed to clearly explain what they actually want the end game of the financial system to be.  

Amid the confusion, a new reality is dawning on banks: that none of these requirements may actually matter that much. The real measure they will be judged against, and so run their businesses to, are the results of "stress tests" administered by the Federal Reserve. These are the basis for decisions on whether banks can return capital to shareholders. Banks in early January will submit capital plans to the Fed for review.

Getting to a safer financial system surely starts with banks. It will have to end, though, with a clearer vision for them.

Source: WSJ
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