Fed’s Barr: Plans to propose several changes to bank capital rules

Fed’s Barr (who is in charge of banking supervision at the Fed) is on the wires speaking about regulation

  • The existing capital framework is sound, but there are plans to build on those requirements.
  • In the coming months, plans to propose several changes to bank capital rules.
  • The need for regulators to focus on bank resilience broadly has been reinforced by recent bank failures.
  • There is a recommendation that enhanced capital rules should apply to banks with $100 billion or more assets.
  • Consistency with standards adopted by the International Basel Committee should be maintained in risk-based capital rules.
  • The proposed changes would increase capital requirements overall, but principally for the largest, most complex banks.
  • Fundamental changes to the global systemic bank surcharge or countercyclical capital buffer are not being considered.
  • Banks needing to raise capital could do so in less than two years with retained earnings, while still maintaining dividends.
  • It is stated that most banks currently have enough capital to meet proposed new requirements.

The proposals are in reaction to the banking issues that plagued some of the regional banks including Silicon Valley Bank. The higher capital requirements are have been telegraphed by the Fed.

Later this week, Citibank, J.P. Morgan Chase will be announcing their earnings (on Friday).

This article was written by Greg Michalowski at www.forexlive.com. Source