Media reports: American banks and Wall Street business groups collectively sued the Federal Reserve, because on the 23rd, the Federal Reserve announced in a statement that it is seeking to make changes to bank stress tests and will solicit public opinion on so-called 'significant changes' to improve the transparency of bank stress tests.
The Wall Street business group refers to the U.S. banking policies, which include major banks such as JPMorgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, Citibank, Wells Fargo, and others.
They stated that the Federal Reserve's determination that large banks should perform under hypothetical economic turmoil and allocate capital accordingly does not conform to appropriate administrative procedures.
The core of this lawsuit is that the banking industry believes the Federal Reserve did not adequately consult the public and the industry when formulating the models and scenarios for stress testing.
In 2023, both sides had a fierce clash once, ultimately leading to a compromise by the Federal Reserve, which backed down in the first quarter of this year due to the proposed implementation of new capital rules (Basel III) that triggered a rapid collective protest from Wall Street against the Federal Reserve, threatening to file a lawsuit.
This counterattack also marks a significant escalation of Wall Street institutions' resistance against the Federal Reserve's regulation of the banking industry. Just before Trump is about to take office as President of the United States, this whole situation may not be a coincidence.
Trump's core policies during his campaign included: tax cuts, deregulation, interest rate cuts, and increased investment. There were previous reports that Trump's advisers sought to reduce or eliminate banking regulatory agencies, and investors also expect that under Trump's administration, regulatory scrutiny of the banking industry will be relaxed.
Of course, this lawsuit is not an incidental event; it is a concentrated outbreak of the long-standing dissatisfaction of the American banking industry with the existing regulatory framework. Since the financial crisis, U.S. financial regulation has become increasingly stringent, which, while reducing systemic risk to some extent, has also imposed significant compliance costs and operational pressures on the banking industry.
Let's see who wins or loses in this conflict and how things develop in the future; we will wait and see together.$BTC
