The Federal Reserve seeks comments on revising its bank regulatory rating system.

The Federal Reserve announced on July 10th local time that it will seek feedback on a proposal to revise the framework for supervisory ratings of large banks. The Fed stated that the bank regulatory framework released in 2018 includes four possible ratings: broadly meets expectations, meets expectations with conditions, deficient-1, or deficient-2. The proposal would modify the framework to consider banks with no more than one deficient-1 rating as "well managed" banks. Companies that do not meet this standard will be considered poorly managed and may be subject to restrictions on certain activities. If a bank receives a deficient-2 rating in any category, it will continue to be considered poorly managed, consistent with the current framework.