The Federal Reserve has put forth a proposal to revamp the regulatory rating framework for large banks. Under this new framework, banks that receive no more than one rating of "deficiency-level 1" will be classified as "well-managed." Conversely, banks that fail to meet the set standards or receive any rating of "deficiency-level 2" will be deemed poorly managed and may face regulatory restrictions. This initiative aims to enhance the effectiveness of the current four-tier regulatory rating system, which was established in 2018.