Lessons from the History of the changing Regulatory Perimeter of US Banks

The Federal Reserve Bank prints both the money and their research…as evidenced here…

Mostly Economics

Federal Reserve researchers had released an interesting paper in June-21 on the changing regulatory perimeter of US banks.

The researchers have released a shorter version of the paper:

Banking organizations in the United States have long been subject to two broad categories of regulatory standards. The first is permissive: a “positive” grant of rights and privileges, typically via a charter for a corporate entity, to engage in the business of banking.2 The second is restrictive: a “negative” set of conditions on those rights and privileges, limiting conduct and imposing a program of oversight and enforcement, by which the holder of that charter must abide.3

Together, these requirements form a legal cordon, or “regulatory perimeter,” around the U.S. banking sector. Inside that perimeter are firms, or other legal persons, that can legally conduct a set of banking activities, subject to various forms of regulation and supervision. Outside that perimeter…

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