JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Goldman Sachs Group Inc. are among eight U.S. banks facing new domestic rules on capital and debt that would be even stricter than global standards approved yesterday. Lenders will be forced to maintain a ratio of capital to assets that exceeds the 3 percent floor set by the Basel Committee on Banking Supervision, Federal Reserve Governor Daniel Tarullo said yesterday. Another measure would compel banks to hold a minimum amount of equity and long-term debt to help authorities dismantle failing lenders, Tarullo said. The remarks show U.S. regulators plan to ratchet up demands for bigger buffers against losses to prevent a repeat of the 2008 credit crisis, ignoring bankers who say lending and profit will suffer. The measures would come on top of toughened global standards known as Basel III that Fed governors approved unanimously, even as Tarullo said parts remain too weak. “We’re in the first few chapters of a horror story for the big banks, with the worst to come,” said Coryann Stefansson, a managing director at PricewaterhouseCoopers LLP. “It’s clear that the U.S. is willing to push for stronger capital.” People with knowledge of the matter have said U.S. regulators may want to double Basel’s 3 percent capital threshold, known as the leverage ratio. The Federal Deposit Insurance Corp. said a proposal may be published next week.
Posted on: Wed, 03 Jul 2013 21:50:07 +0000
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