Federal Reserve Governor Milan calls for prioritizing banking regulatory reforms, saying cumbersome rules hinder industry development

Jinse Finance reported that Federal Reserve Governor Stephen Miran stated that he hopes the Fed will first readjust a series of regulatory rules for Wall Street before discussing other economic issues related to the central bank's balance sheet. "For many years, financial regulation has basically moved in one direction, continuously increasing restrictions on the banking industry," Miran said in remarks prepared for the Bank Policy Institute on Wednesday. He added that the interaction between regulation, financial markets, the economy, and the implementation of monetary policy is often underestimated. "While there is constant discussion about bank reserve balances and their interest, balance sheet composition, and Treasury market intermediation, I believe most of these discussions are downstream issues of the bank regulatory framework," he said. Miran emphasized that regulators should avoid overreacting, stating that the rules introduced after the 2008 crisis went too far. He pointed out that this has led to much traditional banking business moving outside the regulatory perimeter, partly due to 'cumbersome rules.' "While I have no bias against non-bank financial companies, credit allocation should be driven by market forces, not regulatory arbitrage," he said.