Fed Floats Easier Path for Big Banks Getting ‘Well Managed’ Tag

The Federal Reserve said it will seek comment on a proposal to change its supervisory rating framework for big banks, easing the requirements for lenders to be considered “well managed.”

The Fed said Thursday the bank supervisory framework, which evaluates whether lenders have sufficient financial and operational strength, includes four potential ratings: broadly meets expectations, conditionally meets expectations, deficient-1, or deficient-2. The proposal would alter the framework by considering a bank with no more than one “deficient-1” rating to be “well managed.”

A bank with a deficient-2 rating for any component would continue to be considered not “well managed,” which ...