United States: The White House considers measures for banks without Congress

by Andrea Shalal and Pete Schroeder

WASHINGTON (Reuters) – U.S. President Joe Biden’s administration on Thursday proposed a shortlist of new measures to strengthen the banking system, saying they could be implemented without going through Congress, with a small group of medium-sized banks.

The White House said banks with assets between $100 billion and $250 billion should have more liquidity, bolster their capital and undergo regular stress tests.

“These are actions that can all be taken under laws already in effect, and therefore there is no need for congressional action to authorize (federal) agencies to take these actions,” said a high representative of the American presidency.

This move by the White House comes after the shocks experienced this month by the American banking sector, with in particular the bankruptcy of Silicon Valley Bank and Signature Bank, as well as the rescue plan for Credit Suisse.

Joe Biden “urges federal banking agencies to consider a set of reforms that will reduce the risk of future banking crises,” said the representative of the White House.

Hearing this week by Congress, the main banking regulator of the United States Federal Reserve (Fed) said that Silicon Valley Bank had “very badly” managed risks. Elected Republicans and Democrats, however, criticize federal regulators and the Fed for having been lax in their supervision.

The U.S. central bank and other agencies have already signaled they are exploring ways to tighten banking regulation, especially for midsize banks.

(Report Andrea Shalal and Pete Schroeder, with Nandita Bose; French version Jean Terzian)