Republicans are using the coronavirus crisis to win long-desired bank deregulation, raising potential for bank failures. We obtained letters showing the deregulation push. interc.pt/2LbrvVx
Regulators have already lifted risk taking rules on "community banks" ie banks w/less than $10b in assets in response to Covid-19. But small banks helped drive the last financial crisis. There's much attention on big banks but nearly 500 community banks failed in the last crisis.
Community banks have a far better reputation than Wall Street banks, making them a convenient talking point for deregulation, but the rapid deregulation of small banks will heighten risk taking at a time when a wave of defaults could drive a new tsunami of small bank failures.
In the next phase of coronavirus relief, now big Wall St. banks might get relief from capital requirements, allowing much greater risk nytimes.com/2020/07/27/bus…
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