Big banks will need to hold more capital to as risk guard under Fed proposal

📆 7/27/2023 10:58 PM
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Banks such as Morgan Stanley, or even a credit card company such as American Express, would be more impacted because their business models are heavily weighed toward fee income.

The proposal also takes aim at those banks with between $100 billion to $250 billion in assets, which have been among the most impacted by the banking panic that started in March this year with theFed policymakers have said repeatedly that there needs to be more supervision of these big-but-not-gargantuan institutions.

The industry’s main argument is that any capital that has to be warehoused on a bank’s balance sheet is capital that cannot be used to fund loans, make trades, or return profits to shareholders through stock buybacks or dividends.REUTERS

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