Relaxing bank capital requirements would risk another crisis

AMERICA’S biggest banks are among the most leveraged financial institutions operating in the country today.

They are permitted to finance lending and other activities with 94 US cents debt and only about 6 cents of tangible equity for every dollar in assets. Their profits are breaking records – for some, soaring 35% to an all-time high. Their lending is robust, generally outpacing economic growth in recent years.