U.S. regulators to force big banks to increase capital requirements by 20%

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U.S. regulators to force big banks to increase capital requirements by 20% - WSJ

Published Jun 05, 2023 20:46

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U.S. regulators to force big banks to increase capital requirements by 20% - WSJ

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Big banks will soon have to boost their balance sheets as U.S. regulators prepare to unveil new measures aimed at improving the resilience of the banking system following a spring crisis.

The new changes will be proposed as early as this month, the Wall Street Journal reports. One of the measures will see large banks raise overall capital requirements by roughly 20%. The precise amount will be ultimately determined by the bank’s business activities.

However, those banks with large trading businesses are expected to bear the biggest impact. This is because the new measures will treat fee-based activities as an operational risk, the report added.

“Higher capital requirements are unwarranted,” Kevin Fromer, the CEO of the Financial Services Forum, which represents the largest U.S. banks, told the WSJ.

“Additional requirements would mainly serve to burden businesses and borrowers, hampering the economy at the wrong time.”

Morgan Stanley (NYSE:MS) is one of the banks that has a large dependency on its wealth-management business.

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U.S. regulators to force big banks to increase capital requirements by 20% - WSJ

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