Bank / Credit Union

Big banks call on Fed to overhaul bank capital draft

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January 16, 2024

Big banks called on the U.S. Federal Reserve to rewrite a proposed rule for banking capital. This rule would require banks to set aside more cash to cover risks in the wake of multiple bank collapses in 2023, according to a report by Yahoo! Finance.

The proposal would raise the capital requirements by 16%. However, bank executives said that these requirements would hurt products and services, especially for green lending. In addition, Citi, JPMorgan Chase, Bank of America and others sent a public letter to the Fed saying that this change would violate federal laws as it doesn't justify the changes.

Michael Barr, vice chair for supervision at the U.S. Federal Reserve, said this change is necessary to protect against economic shocks, but the Fed is open to suggestions and adjustments.