“Big banks were warned of further government-inflicted pain, small banks won concessions and mortgage lenders were granted a reprieve as the Federal Reserve on Tuesday finalized a key rule meant to strengthen banks to guard against another near-collapse of the U.S. financial system.

The directive requires banks to more than double the amount of capital they use to fund loans and investments, reduce borrowing, and obey stricter standards when classifying the riskiness of assets such as securities and derivatives.

Big banks have to start complying in January. Smaller banks have an extra year. Some nine in 10 already meet the requirements, and those that don’t collectively only have to sock away a few billion dollars in earnings over the next several quarters to meet the new rules.

Dan Tarullo, the Fed governor overseeing financial regulation, effectively notified the biggest banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, State Street and Bank of New York Mellon — that even tougher rules would be coming in the next few months, as the Fed taxes size and complexity in a bid to make it so expensive for banks to be big and complicated that they will voluntarily shrink and simplify their operations to forever end the perception that some are ‘too big to fail.’”

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Read the full Huffington Post article here