US banks could face 20% increase in capital requirements: report

US regulators are preparing to tighten rules for big banks, whose capital requirements can be increased by an average of 20%, The Wall Street Journal reported on Monday, in a move to bolster the financial system’s resilience after a series of medium-sized bank failures this year.

Regulators are on track to propose the changes as early as this month, the WSJ reported, citing sources familiar with the matter.

Last month, the Federal Reserve’s top regulator told Congress that the central bank will likely unveil its plan to tighten capital rules for banks over the summer, ensuring that regulators scrutinize banks more aggressively. .

Fed oversight vice chair Michael Barr said the central bank was “carefully considering” rule changes for larger regional banks.

The WSJ said the capital charge amounts would depend on the bank’s activity, with megabanks with large commercial assets expected to receive the largest increases.

Institutions like Morgan Stanley and credit card giant American Express, which rely heavily on fee revenue, could also face large capital raises, the WSJ said.

Morgan Stanley and American Express did not immediately respond to a Reuters request for comment.

Source: Terra

Rose

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