Mar 2, 2020 - Economy

Bank group calls for return of financial crisis measures

Dion Rabouin

Illustration of a financial bull — Illustration: Sarah Grillo/Axios

Top officers at America's largest bank lobbying organization are calling on the Fed not only to cut U.S. interest rates, but also to institute a series of reforms that were last put in place during the 2008 financial crisis.

What's happening: The president and CEO, the chief economist and the head of research of the Bank Policy Institute, which represents the nation's leading banks, posted a blog Sunday laying out a set of policy prescriptions they encourage the Fed to use to fight possible economic damage from the coronavirus outbreak.

The proposals include cutting banks' reserve requirements to zero, lowering the Fed's discount borrowing rate, and several other measures designed to increase banks' resilience to a major financial shock.

Why it matters: The note shows how worried banking industry advocates are about the impact of COVID-19.

It's also the latest example of the industry attempting to use a crisis to roll back Dodd-Frank financial regulations that were designed to prevent another market meltdown.

Watch this space: Since rates in the repo market spiked in September, the Fed has been working with officials at major financial institutions to revise some of its rules.

Go deeper: Federal Reserve: Coronavirus poses "evolving risk" to the economy

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Bank group calls for return of financial crisis measures

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