Greater security: People pass the JPMorgan Chase headquarters in New York City. The revised requirements on the big banks may be proposed as early as this month and are dependent on their activities. — AFP
NEW YORK: Large lenders in the United States may face a 20% increase in capital requirements in the aftermath of a string of collapses of smaller regional lenders this year, according to the Wall Street Journal.
The revised requirements could be proposed as early as this month and are dependent on lenders’ activities, according to the report, citing people it didn’t identify.
Institutions with large trading businesses would take the biggest hit, while those heavily dependent on fee income could also face significant increases, the report said.
Banks with at least US$100bil (RM457bil) in assets may have to adhere to the new requirement, which is lower than the existing US$250bil (RM1.1 trillion) threshold, for which regulators have reserved their most stringent rules, according to the report.
Michael Barr, the Federal Reserve’s vice-chairman for supervision, has previously said that US officials are reviewing bank capital requirements and are committed to putting in place structures that align with the global Basel III standards.
Barr, who took over as the Fed’s top bank watchdog in July 2022 and was an architect of the Dodd-Frank Act of 2010, has also signalled that he supports tougher restrictions for bigger, systemically important lenders than smaller institutions.
The Fed is playing a leading role in crafting the measure, along with the Federal Deposit Insurance Corp and the Office of the Comptroller of the Currency, according to the Wall Street Journal.
All three agencies are expected to seek comment on the proposed capital rules before voting to complete the changes and eventually implementing them over the coming years, the report said.
JPMorgan Chase and Co chief executive officer Jamie Dimon was among critics blasting more cumbersome capital requirements, calling an upcoming increase “bad for America” last year ahead of a pair of congressional hearings. — Bloomberg
