|  | | 2012 News and Press Releases | | |
HEADLINE NEWS:
The Fed Proposes Stronger Buffers For Banks
Peter Eavis
The New York Times DealBook. June 7, 2012
_________________________________________________________________________
EXCERPT: The Federal Reserve proposed on Thursday that the country’s banks adopt a broad package of international regulations aimed at making the global financial system more resilient to shocks. The overhaul, drafted by a body consisting of central banks and national bank regulators, will require banks to hold sturdier buffers against losses. The Basel Committee on Banking Supervision devised the rules, known as Basel III, after the 2008 financial crisis revealed the frailty of global banks. Many of the requirements have been known for months, and banks are already fortifying their balance sheets in preparation. But the Fed’s proposals will be scrutinized for evidence that the regulations will be more stringent than banks expected. The focus of the overhaul is capital, which banks must hold to protect themselves against losses. The critical requirement compares Tier 1 common capital with a measure of a bank’s assets. The rules introduced Thursday require that Tier 1 common be equal to 7 percent of assets by the end of 2018, when the phase-in period for the regulations ends. Several large American banks already exceed or are close to that capital ratio. |
|
|
