US megabanks to face increased capital requirements

Up to 20% more
US megabanks to face increased capital requirements
New capital requirements for US banks

US regulators, led by the Federal Reserve, are expected to introduce tougher capital requirements for banks by the end of June.

The new rules, which are part of a global effort to standardize capital requirements, will implement the final set of bank capital rules laid out by the Basel Committee and are set to take effect from the beginning of 2025.

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The changes could result in US banks facing capital hikes of up to 20%, depending on their business models.

Megabanks and banks with big trading businesses, such as Morgan Stanley and American Express, are expected to face the largest increases, while banks heavily dependent on fee income, such as investment banking and wealth management, could also face significant capital increases.

The Fed has been reviewing capital requirements for banks since the 2008 financial crisis, and has said that it will take a more aggressive approach to supervising lenders following recent bank failures.

The precise details of the proposed new rules have not yet been revealed, but they are expected to be announced soon.

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