consider final bank leverage rules on April 8
Send a link to a friend
[April 02, 2014]
By Emily Stephenson
WASHINGTON (Reuters) — U.S. bank
regulators will meet next week to vote on final rules that would
force the biggest U.S. banks to rely less on debt to fund their
businesses, the Federal Reserve said on Tuesday.
The Fed's board of governors will meet on April 8 to finalize the
so-called leverage requirements, seen as much tougher than the rules
crafted by international regulators when U.S. officials first
proposed them in July 2013.
The rules are part of an global agreement to fortify banks known as
Basel III. Unlike risk-based capital requirements, leverage limits
are calculated as a percentage of a company's total assets, and are
considered harder to game.
The Fed, Federal Deposit Insurance Corp (FDIC) and Office of the
Comptroller of the Currency (OCC) proposed forcing the eight biggest
U.S. banks, including JPMorgan Chase and Citigroup, to maintain
equity capital equal to 6 percent of their total assets.
The bank holding companies would have to meet a 5 percent leverage
FDIC Vice Chairman Thomas Hoenig told reporters in February that he
expected the final rules would closely mirror the proposal. The Fed
did not release the details of the final rules on Tuesday.
Fed officials also will propose at the April 8 meeting tweaking the
way banks tally up assets to calculate their capital needs under the
[to top of second column]
In January, international regulators revised their method for
calculating leverage requirements. The changes made the ratios
tougher to meet in some ways, including by adjusting the way
derivatives are treated.
Fed Governor Daniel Tarullo recently told a congressional panel that
the Fed expected to align its rules with the global standard.
The FDIC and OCC also must take up the capital rules but have not
announced when they will do so.
(Reporting by Emily Stephenson; editing by Steve Orlofsky and Leslie
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.