Top U.S firms may face bigger capital requirements

Money On Hook

Eight of the biggest U.S. banks are about to find out just how risky the Federal Reserve thinks they really are.

Bloomberg News reports that global regulators have already agreed that the world’s biggest banks, including JPMorgan and Citigroup, need to have extra capital to absorb losses in a crisis.

Fed Governor Daniel Tarullo has said the U.S. requirement should be more stringent than the international standard and take into account how banks borrow money to determine how much more capital they need.

The Fed proposal, to be announced Tuesday, may lower returns for shareholders of U.S. banks compared with firms in other parts of the world, according to analysts. The extra capital requirement could be heavier for firms such as Goldman Sachs and Morgan Stanley that rely more on markets for short-term funding, instead of looking to depositors.

To access the complete Bloomberg News article hit the link below:

Large Banks Face U.S. Tougher-Than-Global Capital Rule

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