Regulators Seek Stiffer Bank Rules on Capital

Read NY Times article

This story relates the FDIC proposal for new bank capital requirements designed to prevent the “too big to fail” scenario. The goal is to make banks maintain higher capital levels , i.e., putting more of their own money at risk, so they can meet crises without needing capital infusions from the tax payers. Banks would have to have capital equivalent to 5% or 6% of new asset totals. Two of the big banks (Bank of America and Wells Fargo) appear to already meet this requirement. So, it must be a modest change the banks should accept, but they are strongly opposed to any regulation of their privileges.

These rule proposals are weaker than the legislation introduced by Senator Sherrod Brown (D of Ohio) and Senator David Vitter (R of Louisiana)   Senate bill S.798.   Unfortunately, there are only three co-sponsors and the bill is stuck in committee.

Ask your senator to co-sponser S.798 Terminating Bailouts for Taxpayer Fairness Act

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