President Joe Biden’s administration is calling on regulators to tighten the rules for mid-sized banks, the latest step in its response to the banking crisis that led to the failure of a pair of regional lenders.
The White House on Thursday called for federal banking agencies, in conjunction with the Treasury Department, to enact a series of changes to tighten rules. None of the measures requires Congressional approval, the White House said in a statement.
The changes include reinstating rules for banks with assets between US$100 billion and $250 billion — a category that Silicon Valley Bank, which failed, fell into — including liquidity requirements, enhanced stress testing and so-called “living wills” that show how banks that size could be wound down.
The White House also called for:
annual stress tests for banks in that range, instead of every two years
shortening the time to apply stress tests once banks reach $100 billion in assets
strengthening supervisory tools to ensure banks can withstand rising interest rates
The White House backed calls for community banks to not share the cost of replenishing the Deposit Insurance Fund, which was used to backstop SVB and Signature Bank, which also failed.
The moves come as Biden searches for tools to further calm the banking crisis and prevent another failure. Lael Brainard, the former Fed vice chair who now leads Biden’s National Economic Council, has argued in the past that the Fed went further than it had to in rolling back regulations under 2018 measures enacted by Congress.
A White House official, briefing reporters on the announcement, said it will ultimately be up to regulators to enact the changes but that the administration had spoken with them in preparing its proposals.
Treasury Secretary Janet Yellen will warn in a speech Thursday that deregulatory efforts might have gone too far and contributed to the recent crisis.
Yellen plans to say it is important to “reexamine whether our current supervisory and regulatory regimes are adequate for the risks that banks face today.”
Progressive lawmakers have pointed to the 2018 deregulation push as a contributor to the bank failures, whereas conservative lawmakers who backed deregulation have laid blame elsewhere, such as with regulators.
The rollback of banking regulations under former President Donald Trump garnered the votes of more than a dozen Democratic senators.
The Fed has launched an investigation into the events that led to the collapse of Silicon Valley Bank in California, and Congress is likely to open its own inquiries.
MTY Food Group Inc. says its profit and revenue both slid in its most recent quarter.
The restaurant franchisor and operator says its net income attributable to owners totalled $34.9 million in its third quarter, compared with $38.9 million a year earlier.
The results for the period ended Aug. 31 amounted to $1.46 per diluted share, down from $1.59 per diluted share a year prior.
The company behind 90 brands including Manchu Wok and Mr. Sub attributed the fall to impairment charges on property, plants and equipment along with intangibles assets.
Its revenue decreased slightly to $292.8 million in the quarter from $298 million a year ago.
While CEO Eric Lefebvre saw the quarter as a sign that the company’s ongoing restructuring is starting to bear fruits, he said the business was also hampered by significant delays in construction and permitting that resulted in fewer locations opening.
This report by The Canadian Press was first published Oct. 11, 2024.
Taiga Motors Corp. says the Superior Court of Québec has approved its sale to a British electric boat entrepreneur.
The Montreal-based maker of snowmobiles and watercraft says it will be purchased by Stewart Wilkinson.
Wilkinson’s family office is behind marine electrification brands that include Vita, Evoy, and Aqua superPower.
Wilkinson and Taiga did not reveal the terms or value of the deal but say Wilkinson will assume Taiga’s debt to Export Development Canada and has committed to funding Taiga’s business plan.
The companies say the transaction will allow them to achieve greater economies of scale and deliver high-performance products at compelling prices to accelerate the electric transition.
The sale comes months after Taiga sought bankruptcy protection under the Companies’ Creditors Arrangement Act to cope with a cash crunch.
This report by The Canadian Press was first published Oct. 11, 2024.
Toronto-Dominion Bank is facing fines totalling about US$3.09 billion from U.S. regulators in connection with failures of its anti-money laundering safeguards.
The bank also received a cease-and-desist order and non-financial sanctions from the Office of the Comptroller of the Currency that put limits on its growth in the U.S. after it was found that TD had “significant, systemic breakdowns in its transaction monitoring program.”
