Senators Seek To Increase Capital Standards On Large Banks

13604_dollar_orange Senators Seek To Increase Capital Standards On Large Banks New legislation being prepared by Sens. Sherrod Brown, D-Ohio, and David Vitter, R-La., would require the nation's largest banks to hold capital in excess of Basel III standards.

Bloomberg News reports that the legislation, which is still being drafted, would require the so-called ‘too big to fail’ banks to maintain a 10% capital standard plus an additional 5% surcharge if they maintain assets of more than $400 billion. Under Basel III, banks must hold at least 7% of Tier 1 capital against a bank's risk-weighted assets, while the larger banks carry as much as a 2.5% surcharge for their XL-sized asset base.

Neither senator has formally made the draft of the legislation available for public comments. A spokesperson for Vitter claims that a ‘Wall Street lobbyist stole and distributed a copy of our draft bill to try and drum up support for protecting the big banks' taxpayer-funded handouts – and ultimately remain too big to fail.’


Please enter your comment!
Please enter your name here