Make Kitco Your Homepage

Off The Wire

US banks could face 20% hike to capital requirements - WSJ

Kitco News

June 5 (Reuters) - U.S. regulators are preparing to tighten rules for large banks, which could raise their capital requirements by 20% on average, the Wall Street Journal reported on Monday, to boost the financial system's resilience after a spate of midsize bank failures this year.

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

Last month, the U.S. Federal Reserve's top regulatory official told Congress that the central bank would likely unveil its plan to ratchet up capital rules for banks this summer and ensure supervisors more aggressively police lenders following the bank failures.

Fed Vice Chair for Supervision Michael Barr said the central bank was "carefully considering" rule changes for larger regional banks.

The WSJ said that the precise amount of capital requirements will depend on the bank's business, with U.S. megabanks with big trading businesses expected to face the largest increases.

Banks such as Morgan Stanley (MS.N) and credit card giant American Express (AXP.N) that are heavily dependent on fee income, such as from investment banking or wealth management, could also face large capital increases, the WSJ said.

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

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.