FINANCIAL SERVICES REGULATIONS: Improvements Needed to Policies and Procedures for Regulatory Analysis.

This document is a report to congressional committees on financial services regulations. It discusses improvements needed in regulatory analysis policies and procedures, specifically focusing on changes made by the Federal Reserve to stress tests. While banks generally viewed these changes as improvements, concerns were raised about the lack of information and short time frames for new capital requirements. The report also examines the analyses conducted by regulators for capital and liquidity rules and finds that they did not consistently reflect leading practices. Recommendations are made for the Federal Reserve to update its policies and procedures and for the Office of the Comptroller of the Currency and the Federal Reserve to develop policies for conducting retrospective reviews. The document also provides information on federal banking regulators, their functions, and the regulations they enforce. It discusses the purpose of federal banking supervision, requirements for capital and liquidity, stress testing, and the use of regulatory analysis in rulemaking. The document highlights the laws and acts that govern regulatory analysis and the assessment of benefits and costs in rulemaking. It also mentions the need for retrospective reviews of existing regulations and provides examples of laws and orders that require such reviews. The document then focuses on the changes made to the Federal Reserve's supervisory stress tests, including tailoring rules and the stress capital buffer requirement. It explains the different categories of banking organizations and the adjustments made to stress test rules and assumptions. The document also mentions the Federal Reserve's actions during the COVID-19 pandemic, including sensitivity analyses and increased stress testing. The results of the second supervisory stress test showed that [Extracted from the article]