Good Morning Everyone! U.S banks could face 20% hike to capital requirements this month. Regulators want banks to have larger buffers to absorb losses.
This will burden businesses and borrowers at the wrong time.
Credit is about to dry up.
— Genevieve Roch-Decter, CFA (@GRDecter) June 5, 2023
U.S. regulators are planning to boost capital requirements at bigger banks by roughly 20%: sources t.co/hfDi9avaAF
— Lisa Abramowicz (@lisaabramowicz1) June 5, 2023
via WSJ:
WASHINGTON—U.S. regulators are preparing to force large banks to shore up their financial footing, moves they say will help boost the resilience of the system after a spate of midsize bank failures this year.
The changes, which regulators are on track to propose as early as this month, could raise overall capital requirements by roughly 20% at larger banks on average, people familiar with the plans said. The precise amount will depend on a firm’s business activities, with the biggest increases expected to be reserved for U.S. megabanks with big trading businesses.
Banks that are heavily dependent on fee income—such as that from investment banking or wealth management—could also face large capital increases. Capital is the buffer banks are required to hold to absorb potential losses.
US banks prepare for losses in rush for commercial property exit
MORGAN STANLEY EUROPEAN EQUITY MID-YEAR OUTLOOK: WE EXPECT 10% CORRECTION OVER THE SUMMER MONTHS AS GROWTH SLOWS AND LIQUIDITY DECLINES.
— Breaking Market News (@financialjuice) June 5, 2023
The Fed has never started cutting rates with CPI above 3% and UE below 5%.@MichaelKantro @hussmanjp @TommyThornton@biancoresearch @EPBResearch @Convertbond@kayfabecapital @NeelyTamminga @menlobear pic.twitter.com/6OapKzNMqO
— deerich (@deerich101) June 4, 2023
With another jobs day behind us, some food for thought re: recessions and payrolls pic.twitter.com/PUMknXwTbS
— Liz Ann Sonders (@LizAnnSonders) June 5, 2023