Federal Reserve Seeks Public Comment on Proposed Reforms to Bank Supervision Rating System

According to a report by Jinse Finance, the Federal Reserve announced on Thursday that it will publicly solicit opinions on a proposal to revise the supervisory rating framework for large banks. The current regulatory framework, implemented since 2018, divides bank ratings into four categories: Satisfactory, Satisfactory with Conditions, Deficient-1, or Deficient-2. Under the new proposal, a bank will be considered "well managed" as long as it receives no more than one "Deficient-1" rating across all assessments. Institutions that do not meet this standard will be deemed poorly managed, and certain business activities will be restricted. Notably, any bank receiving a "Deficient-2" rating in any single assessment will still be classified as poorly managed—a standard consistent with the current system.