Banking Protocol Undergoes Major Rewrite in 2026
Financial regulatory systems are executing a fundamental reset of post-2008 crisis protocols. Treasury Undersecretary Jonathan McKernan announces comprehensive revision of legacy banking frameworks.
Core System Modifications
The regulatory stack is being rewritten to eliminate inefficiencies in the current architecture. McKernan states: "Post-crisis regulation has entrenched the big banks, suffocated community banks, and stifled growth and innovation."
Key modifications target:
- Capital and liquidity framework optimization
- Basel Committee compliance protocols
- Monetary policy execution interfaces
Digital Asset Integration
The Office of the Comptroller of the Currency has deployed national trust charters for crypto entities since December. This represents a shift from traditional banking protocols to hybrid financial systems.
Comptroller Jonathan Gould emphasizes risk-based supervision: "We're going to tailor our supervision based on the risk profile of the bank, regardless of designation."
Systemic Risk Redistribution
Current regulations have migrated risk vectors to non-bank sectors while reducing banks' control mechanisms. Gould notes the protocol paradox: "Banks remain exposed to those risks, but have less control over them and less ability to mitigate them."
Implementation Timeline
The OCC has executed several optimization patches:
- Leveraged lending rule modifications
- Asset threshold adjustments for enhanced scrutiny
- Supervision focus shift from reputational to financial risk vectors
Gould confirms ongoing development: "We've got a long way to go" in achieving full protocol optimization.
Interagency Coordination
Liquidity rule modifications require coordination between OCC, Federal Reserve, and FDIC due to monetary policy dependencies. The Fed will announce its next interest rate decision Wednesday at 2 p.m., with Chair Powell's post-meeting analysis at 2:30 p.m.
The regulatory rewrite represents a shift toward algorithmic efficiency over legacy compliance structures, aligning with distributed governance principles.