Bill Dudley urges stronger bank resolution regime amid easing capital requirements

Bill Dudley, former president of the Federal Reserve Bank of New York, is making a simple argument that somehow keeps needing to be repeated: fix the safety net before you take it down. In a Bloomberg Opinion column published on September 9, Dudley laid out the case that US regulators need to develop a significantly stronger resolution regime before they even think about loosening bank capital requirements and supervision. The timing is pointed, given that multiple regulatory agencies are currently doing exactly the opposite, proposing lighter capital rules while resolution frameworks remain largely unchanged from the ones that fumbled through the 2023 banking crisis. The regulatory paradox taking shape On one hand, US regulators proposed changes in March 2026 that would reduce capital requirements for large banks on a net basis. On the other hand, the mechanisms for dealing with a bank that actually fails remain stubbornly inadequate. The collapse of Silicon Valley Bank’s parent company resulted in nearly $20 billion in FDIC losses. Those losses weren’t absorbed by SVB’s investors, the people who theoretically accepted the risk. They were recovered through higher assessments on ot...