Jerome Powell, picked by President Donald Trump to lead the Federal Reserve, said Tuesday he favors "tailoring" regulations to alleviate the burden on smaller banks.
Speaking before the Senate Banking Committee during his confirmation hearing, Powell mentioned several areas he'd like to see addressed when it comes to the rules that banks operate under in the postfinancial crisis atmosphere.
The hearing featured a number of exchanges were Powell was pressed on his regulatory views, while other senators unsuccessfully sought to get him to comment on the looming tax reform bill in Congress.
"Tailoring of regulations is one of our most fundamental responsibilities," he said under questioning. "We want regulations to be the most intense, the most stringent for the very largest, most complex institutions and want it to decrease in intensity and stringency as we move down through the regional banks and the community banks. This is something we strive to achieve. We're taking a fresh look at that now."
Powell mentioned the so-called Volcker Rule, which restricts banks from trading for their own accounts, as well as other activities involving hedge funds and private equity. Powell again said the rule should be tougher for bigger banks but less so for smaller institutions, specifically supporting a bill that sets the threshold for restrictions at $10 billion of assets.
Overall, he said he favors the new regulatory environment even though changes need to be made.
"The things that we've done, higher capital, higher liquidity, stress testing, resolution, I think those are important pillars of reform. We can make them more transparent, more efficient and that sort of thing," Powell added. "Generally speaking ... I think the financial system is quite strong."