N.Y. Fed’s Dudley Supports Small Bank Relief from Certain Dodd-Frank Requirements

Noting that more work is still needed to safeguard the U.S. financial system against systemic shocks, New York Federal Reserve Bank President and CEO William Dudley today acknowledged that some parts of the Dodd-Frank Act may have gone too far and said that he would support regulatory relief for smaller, non-systemically important banks.

Smaller firms can face significant cost and compliance burdens because “they don’t have the scale over which compliance and other regulatory costs can be spread,” Dudley said. He noted that some rules — like the Volcker Rule — could be better tailored and simplified for smaller institutions to help reduce regulatory burden, and that “regulatory requirements should be appropriately calibrated to avoid inadvertently creating a competitive advantage for larger financial firms.”

In related news, Dudley announced today that he will retire from his position in mid-2018 to ensure that a successor can be appointed before the end of his term. Dudley’s term was set to expire in January 2019.