Fed Economists Consider $10 Billion Threshold Imposed By Dodd-Frank

Economists at the Federal Reserve Bank of New York examined the "$10 billion threshold" imposed by Dodd-Frank Act regulation, and its "implications for size-based bank regulation" in which "compliance costs ratchet up with size." In their blog post on the New York Federal Reserve Board's Liberty Street Economics site, the economists stated: "[S]ystemic risk and the problem of too big-to-fail can increase with size (plus other factors), so [that] size itself – beyond a point – is problematic. Furthermore, size-based regulation might be a more efficient way to limit bank size and systemic risk than blunter alternatives."

The blog post was written by Research and Statistics Group Assistant Vice President Donald P. Morgan and Markets Group Senior Analyst Brian Yang.