US regulators reconsidering capital increase rules: WSJ
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The news: The Federal Reserve and two other US regulators are considering reducing a proposed 19% increase in capital requirements for the US’ largest banks, according to sources cited by the Wall Steet Journal.
The numbers: The proposed rules unveiled in July last year would change the manner in which banks with over USD100 billion ($149.16 billion) in assets calculate the cash they must set aside to absorb potential losses.
The context: The WSJ reports that top officials from the Fed, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency are discussing substantive and technical revisions to the proposed rules. The Journal reports that the required capital increases may end up being about half as much as the original amount proposed.
JP Morgan chief Jamie Dimon has been actively campaigning against the rules, and encouraged fellow CEOs to bypass the Fed’s Michael Barr in their efforts to pressure other Fed governors to revise the proposals. Dimon has described the proposals which were first designed by Barr as “flawed and poorly calibrated.”
The rules would have an outsized impact on the US’ largest banks, including JP Morgan, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup.
The source: Wall Street Journal
