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The Federal Reserve's vice chair for supervision said the central bank is weighing regulatory and supervisory changes to liquidity management standards. Current approaches, he said, might not be able to contend with the speed of modern runs.
The proposal builds on guidance the agency gave to Fannie Mae and Freddie Mac earlier this year.
Chris Dodd and Barney Frank said the legislation — nearing its 10th anniversary — put banks in position to be a stabilizing force during the coronavirus crisis.
The change — effective immediately — will reduce capital demands by about 2% overall, the Fed estimated, and will be open for a 45-day comment period.
The central bank's sweeping actions suggest a cash shortage gripping sectors directly hit by the pandemic. Banks were supposed to be protected by Dodd-Frank but are still vulnerable to a funding domino effect.
The Treasury secretary suggested a role for lawmakers in containing any fallout with financial contracts stemming from the transition to a new interest rate benchmark.
The commitments were the residue of restrictions that were placed on Ally in the wake of government bailouts in 2008 and 2009.
