Economy

Fed's Tarullo says looking into smaller banks' concerns

Federal Reserve Board Governor Daniel Tarullo.
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Federal banking agencies are looking at many of smaller banks' concerns, including simplifying capital rules for community banks, said Federal Reserve Governor Daniel Tarullo on Wednesday.

In prepared remarks for an outreach meeting Tarullo did not comment on the outlook for the U.S. economy or monetary policy.

In an ongoing review smaller banks have asked for a change regarding the application of Basel III capital requirements, saying the compliance burden is disproportionate to the benefit and the cost of fulfilling record-keeping and reporting requirements is too high, according to Tarullo.

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"I believe that it is possible to develop a simpler set of capital requirements for smaller banks that will be consistent both with the safety and sounds aims of prudential regulation," he said.

He also said federal banking agencies are looking into concerns about asset thresholds used to determine the examination method for banks of different sizes and about making procedural changes to lower costs.