Daily Archives: July 10, 2013

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Too Big To Fail Banks May Be Forced To Put Up Some $89 Billion To Guard Against Losses

Too Big To Fail Banks May Be Forced To Put Up Some $89 Billion To Guard Against Losses

WASHINGTON — Top policymakers and lawmakers have increasingly acknowledged over the past year that despite a new law and numerous regulations enacted in the wake of the financial crisis, some banks remain “too big to fail” — and a threat to the economy.

On Tuesday, the three federal agencies that regulate the nation’s banks responded to those worries, and concerns over subsidies that could be provided — and funded by taxpayers — to shore up these critical institutions. The Federal Deposit Insurance Corporation, Federal Reserve and Office of the Comptroller of the Currency answered with a proposal for a much stricter cap on big banks’ leverage than had been set as part of an international agreement on bank regulation known as the Basel III accords.

In turn, regulators estimate eight of the largest U.S. banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon and State Street — may be forced to stump up some $89 billion in capital to back up their loans and securities, in order to guard against unforeseen losses.