President Donald Trump has appointed Travis Hill as acting chair of the Federal Deposit Insurance Corporation (FDIC), signalling a significant shift towards lighter-touch regulation at one of America's key banking watchdogs.

Hill, who currently serves as vice chair of the FDIC and is considered a frontrunner for the permanent position, has outlined an agenda focused on reducing regulatory burdens across the banking sector. He succeeds Martin Gruenberg in the role.

In recent remarks to the American Bar Association's Banking Law Committee, Hill called for sweeping changes to proposed capital requirements known as Basel III endgame, arguing they contain duplicative regulations that could make certain banking activities uneconomical. He has also pushed for scaling back procedural oversight that he says creates "crushing compliance costs" for community and regional banks.

"The FRTB was intended to address the fact that the existing market risk framework does not sufficiently capitalise for tail-risk events," Hill said, referring to the Fundamental Review of the Trading Book requirements. He warned that overlapping regulations could "damage financial market functioning."

Hill advocates for a more permissive approach to financial technology and digital assets, areas where he believes the FDIC has been overly restrictive. He has also called for the agency to distance itself from climate-related banking initiatives, arguing that environmental issues fall outside the FDIC's core mandate of ensuring financial institutions' safety and soundness.

Before joining the FDIC, Hill served as counsel on the Senate Banking Committee, where he played a crucial role in developing legislation that modified post-crisis regulations for regional banks. He also previously worked as a senior adviser to former FDIC chairman Jelena McWilliams during Trump's first term.

The appointment comes at a critical time for the FDIC, which is undergoing substantial internal reform following revelations of widespread sexual harassment and employee mistreatment. Hill has advocated for a comprehensive overhaul of the agency's culture and accountability measures.

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