In a The National Law Journal article looking at how the collapse of Silicon Valley Bank and Signature Bank may impact the banking regulatory landscape, partner Christopher Paridon said the banks’ downfalls have called into question how the Federal Reserve will handle regulation for firms transitioning between different asset categories in the regulatory framework.
As a firm outgrows its existing categorization level, “there’s a transition period where you can see a lag in terms of firms becoming what some people might call riskier, but not yet having to actually undergo the same level of supervisory scrutiny for a year or two,” Christopher said.