Post-crisis financial rules should be reviewed but not reset, Fed’s Powell says

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The raft of rules enacted in the wake of the 2008 financial crisis should be reviewed, but “core reforms” should still stand, Jerome Powell said on Thursday.

The Federal Reserve governor said in prepared remarks to the Global Finance Forum in Washington that regulators should “protect” the main features of the post-crisis rulebook, like higher liquidity and capital standards, and bank stress tests to “avoid a return to the highly vulnerable system that existed before the crisis”.

However, Mr Powell acknowledged that the measures are sometimes too sweeping and “excessively complex”. He suggested that the regulations are ” in too many cases … inappropriately applied to small and medium-sized institutions”.

“We need to go back and broadly raise thresholds of applicability and look for other ways to reduce burden on smaller firms,” he added.

The remarks come amid expectations that the Trump administration and a Republican Congress will attempt to roll-back large portions of the Dodd-Frank financial reform law, which they contend has weighed on the financial system and held-back the economy.

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