Skip to main content

Newsroom

July 12, 2013

Big Banks Will Game New Capital Rules, Lawmakers Fear

Lawmakers pressed regulators Thursday about the significance of new capital rules and a separate proposal to raise the leverage ratio on the largest banks, raising fears they could still allow institutions to effectively “game” the system.

Sen. Sherrod Brown, D-Ohio, praised regulators for suggesting an increase in the leverage ratio, but said it did not go far enough, citing media reports that said large institutions plan to use “optimization strategies,” instead of more capital, to comply with the new rules.

“‘I’m particularly concerned that banks can use risk weights and internal models to game their capital rules,’ Brown said during a Senate Banking Committee hearing on systemic risk.

He was seconded by Sen. David Vitter, R-La., who said the proposed supplemental ratio, which would boost requirements for holding companies to 5% while their insured subsidiaries face a 6% requirement, is insufficient.”

***

Read full American Banker article here

In the News
Share

MEDIA REQUESTS

For media inquiries, please contact us at
press@bettermarkets.org or 202-618-6433.

Contact Us

For media inquiries, please contact press@bettermarkets.org or 202-618-6433.

To sign up for our email newsletter, please visit this page.

Name(Required)
This field is for validation purposes and should be left unchanged.

Sign Up — Stay Informed With Our Monthly Newsletter

This field is for validation purposes and should be left unchanged.

For media inquiries,

please contact press@bettermarkets.org or 202-618-6433.

Donate

Help us fight for the public interest in our financial markets, protecting Main Street from Wall Street and avoiding another costly financial collapse and economic crisis, by making a donation today.

Donate Today