Fed Wants Regional Banks to Shore Up Liquidity

US regulators are demanding regional banks improve liquidity following recent bank failures. The Federal Reserve is issuing warnings to banks like Citizens and M&T, focusing on those with assets between $100 and $250 billion. This comes amid increased scrutiny on banks' funding and liquidity after the Silicon Valley Bank collapse. Regulators are ensuring banks have adequate liquidity planning and access to the Fed discount window. Persistent concerns from the banking crisis remain, with banks facing potential costly measures. Category four banks, previously exempt from recognizing unrealized losses, are now under scrutiny to prevent future crises.

What specific category of banks is currently under heightened scrutiny from regulators?

What changes were made in 2018 legislation regarding banks' recognition of unrealized losses?