The Largest U.S. Banks Now Need More Capital in Event of Crisis, Regulators Say (JPM) (C) (BAC)

July 9, 2013 10:18 AM EDT
The largest U.S. banks are going to need to keep more leverage on hand, according to a joint proposal by federal regulators today.

The Office of the Comptroller of the Currency has proposed a capital leverage ratio of five percent of assets today, versus the current international standard of three percent of assets.

For U.S.-backed lending and deposit units, the leverage ratio would be twice the global standard at six percent.

In a statement today, FDIC chairman Martin Gruenberg said, "A 3 percent minimum supplementary leverage ratio would not have appreciably mitigated the growth in leverage among these organizations in the years preceding the recent crisis."

The FDIC, using data from last September, said banks fell short of the new leverage requirement by $63 billion. Insured lenders would need an additional $89 billion in capital.

The Financial Stability Board identified the largest U.S. banks being affected by the proposed rule as Citigroup Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC), Goldman Sachs Group Inc. (NYSE: GS), Bank of America Corp. (NYSE: BAC), Morgan Stanley (NYSE: MS), State Street Corp. (NYSE: SSI), and Bank of New York Mellon Corp (NYSE: BK).

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