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New York Stock Exchange in Nizhny Manhattan on November 24, 2020 in New York.
Spencer Plath | Getty Images | Gets the image
A Federal Reserve On Wednesday, they proposed to mitigate the key rule of capital, which, according to the banking, restricted its ability to act, attracting at least two officials who say that this step could blow up important guarantees.
Known as an enhanced ratio of additional impact, the measure regulates the number and quality of the capital banks, which should store their balances. The rule follows from the post -financial efforts to ensure the stability of the largest banks in the country.
However, in recent years, when bank reserves have created and problems have grown over the liquidity of the Treasury, the Wall -Strit leaders and the Fed officials have pushed the requirements.
The Fed will vote for new capital rules at 2 pm on Wednesday.
‘This is a sharp increase in the number of relatively safe and low risks on balances in the last decades has led to the fact that lever factor Jerom Powell said in a statement. “Based on this experience, it is advisable to review our original approach.”
In its project, this measure provides a decrease in higher -level capital banks, which should hold by 1.4%or about $ 13 billion for companies. The subsidiaries will see a larger drop – $ 210 billion, which will still be held by parent banks. The standard applies the same rules to the so -called globally system banks as well as their subsidiaries.
Overall, the plan seeks to weaken the banks to take more inventory at a lesser risk, such as the Treasury, which are now being considered in essence, as well as high -yield bonds for capital purposes. Fed regulators are essentially looking for capital requirements that will serve as a security network rather than contact.
However, Governors Adriana Kugarir and Michael Barr, a former vice -seeker, said they would oppose this step.
“Even if the following mediation in the Treasury market occurred in the usual times, this proposal is unlikely to help during stress,” the bar said in a separate statement. “In short, firms are likely to use the proposal to distribute capital for shareholders and participate in the highest profitable events, not for a significant increase in the mediation of the Treasury.”
The current Vice -Speaker Michel Bowman and Governor Christopher Waller have published statements that support the changes.
The leverage factor has criticized that the banks were essentially fined for the maintenance of the Treasury. The official documents published on Wednesday say that the new rules meet the so -called Basel standards that set standards for banks around the world.