US Bank Regulators Go Bigger Than Basel, Seek Tougher Capital Rules | White & Case LLP International Law Firm, Global Law Practice
US Bank Regulators Go Bigger Than Basel, Seek Tougher Capital Rules

US Bank Regulators Go Bigger Than Basel, Seek Tougher Capital Rules

On July 9, US regulators proposed stricter capital standards for the biggest banks, pushing for parent companies to hold five percent of bank assets and for their federally insured subsidiaries to hold six percent of assets. This is greater than the international standard that was set by the Basel Committee on Banking Supervision in 2010, which called for a capital level of three percent of assets. US banks believe that the new measures will be detrimental, forcing them to reduce lending and therefore harm profits.

"As the economy starts to move, it’ll bite," says Ernest Patrikis, a former Federal Reserve Bank of New York general counsel and now partner at White & Case. The rules will "make the US banks a little less competitive, a little less profitable."