Banks and business groups sued the US Federal Reserve (Fed) in late December over allegations that the US central bank has been pressuring Wall Street firms for breaking the law.
The Banking Policy Institute, which represents big banks such as JPMorgan, Citigroup and Goldman Sachs, which is affiliated with the American Bankers Association and the Ohio Bankers League, accused the Fed of having to address its long-standing violations.
The lawsuit, filed in US District Court in Ohio, claims that the Fed’s actions interfered with the performance of big banks in the face of economic downturn decisions and capital requirements and did not follow proper administrative procedures.
The lawsuit marks the latest example of the banking industry becoming bolder and challenging the power of US regulators, especially in the wake of a recent Supreme Court ruling that placed new restrictions on administrative authority.
The group also called on the Fed to be more open about how it assesses the strength of the country’s giant banks based on performance and annual tests before making decisions.
In addition, the prosecution is due to the fact that they require a lot of capital allocated to fulfill obligations and determine the scope of dividend payments.
