Fed ‘tailoring’ led to larger, less capitalised regional US banks

Lenders freed from toughest requirements in 2018 grew balance sheets but saw capital ratios slip

Several mid-sized US lenders that benefited from a loosening of the strictest capital and liquidity requirements four years ago have reported falling capital adequacy ratios ever since, Risk Quantum analysis shows, suggesting the reforms, ushered in by the Trump administration to relieve community banks and credit unions from some of Dodd-Frank's red tape, have also led to an erosion of loss-absorbing buffers.

The Economic Growth, Regulatory Relief and Consumer Protection Act, colloquially