WASHINGTON: The U.S. Federal Reserve on Tuesday proposed a framework for determining when a company has taken control of a bank and must face more rigorous oversight and restrictions, a move that could remove hurdles for banks seeking to attract investors and partners.
The Fed's efforts to clarify its thinking on bank control could help banks looking for new investors or partners, including private equity or fintech firms, without subjecting them to banking regulations and other restrictions, according to analysts. "The proposal would improve the transparency of the board’s control framework by placing substantially all of the board’s control positions into a comprehensive public regulation," Quarles said.The proposal is largely similar with the Fed's existing practices on bank control standards, but is now being made formal through a proposed rule, according to Fed officials.
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