On November 19, Fed Board of Governor Member Stephen Miran spoke on the Fed’s ongoing efforts to revise banking regulations, describing five principles to guide decision-making, such as balancing regulatory costs and benefits, avoiding overreaction to crises, maintaining a minimal institutional footprint, ensuring transparency, and keeping an open mind. Miran stated his belief that past regulatory overreach had restricted the banking sector and shifted traditional banking activities to nonbank financial companies, and that the agency is now focusing on reforms that may provide relief to community banks within the regulatory framework.

In his remarks, Miran expressed support for proposals to reform bank leverage ratios, arguing that leverage requirements should not incentivize high-risk behavior or constrain banks’ ability to hold certain assets. Among other proposals, Miran stated that removing Treasurys and reserves from the leverage ratio denominator would help insulate the Treasury market from liquidity stress.