After the recent bank failures in the United States, the local regulatory authorities according to a newspaper report will soon enact stricter capital rules. The big banks could be faced with an average of 20 percent higher capital requirements, the reported Wall Street Journal with reference to people familiar with the considerations. The planned tightening could be officially presented later this month. The exact amount will depend on the size of the banking business. The rate for mega-banks with large trading businesses is likely to increase most significantly.
According to the newspaper, there could also be a sharp increase in capital requirements for institutions such as Morgan Stanley and the credit card company American Express. These are heavily dependent on fee income, for example from investment banking. Morgan Stanley and American Express could not comment on the report.
The US Federal Reserve recently said it was considering stricter rules for financial institutions with assets of more than $100 billion. Fed Vice Chairman Michael Barr told a congressional committee in May that the central bank was carefully considering rule changes for larger regional banks.
The background to the considerations are the recent upheavals in the American banking sector. In March, customers began withdrawing massive amounts of money from regional banks Silicon Valley Bank (SVB) and Signature Bank. When California’s SVB collapsed, customers had previously cleared $42 billion from their accounts in just five hours. It was the largest collapse of a US bank since the global financial crisis of 2008.