, Michael Barr, said that he wants banks to start using a standardized approach for estimating credit, operational and trading risks, rather than relying on their estimates. He also said that the Fed’s annual stress tests should be rejiggered to better capture dangers that firms can face. The changes stem from a review to align U.S.
“These changes would increase capital requirements overall, but I want to emphasize that they would principally raise capital requirements for the largest, most complex banks,” he said in a speech at the Bipartisan Policy Center in Washington. “We intend to consider comments carefully and any changes would be implemented with an appropriate phase-in,” he said, adding that most banks already have enough capital to meet the new requirements.
As part of the plan, the largest banks would have to hold an extra 2 percentage points of capital — or an extra $2 of capital for every $100 in risk-weighted assets. He added said that “enhanced capital rules” should apply to banks and bank holding companies with more than $100 billion in assets. Currently, such restrictions apply to firms that are globally active or have $700 billion or more in assets, he said.Article content
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