“When it comes to financial regulations, Republicans are perhaps best known for pushing efforts that would, say, increase the chances of taxpayers bailout big banks or allow financial institutions to skirt regs by operating overseas. So what gives with a recent decision by GOP regulators to push tighter Wall Street rules?

“Republican members of the Federal Deposit Insurance Corporation (FDIC) have convinced two other Wall Street regulators to make the country’s largest banks keep more capital on hand in case of another financial downturn, the Wall Street Journal reported last week, and regulators are expected to issue the proposed rules Tuesday.

“Some background: An international agreement on financial regulations called Basel III requires banks to keep a certain level of safe funds on their balance sheets; it says participating countries must ensure that 3 percent of a bank’s total assets are backed by stockholder money. In the event of a financial downturn, losses would be absorbed by shareholders, and the bank wouldn’t have to be bailed out by taxpayers. The Journal reported that last week, officials at the FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency (OCC) agreed to increase capital requirements for US banks above and beyond what the international agreement requires.

“The proposal, which calls for 5 to 6 percent of a bank’s balance sheet to be stockholder-backed, is something the FDIC’s two Republican members, Thomas Hoenig and Jeremiah Norton, had been pushing hard, despite heavy resistance from other regulators.

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“Some financial reformers, however, say that the proposed capital levels aren’t really something to celebrate. The FDIC’s Republicans “are to be congratulated,” says Marc Jarsulic of the advocacy group Better Markets, but “5 to 6 percent is clearly inadequate”—especially since the average loss at banks that the FDIC bailed out between 2006 and 2010 was 25 percent of their assets.”

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Read full Mother Jones article here