|Obama to Impose Shrinkage of Wall Street Banks|
|by Tom McGregor||Wed, Sep 10, 2014, 12:01 AM|
President Barry Obama has his executive orders pen and phone handy as he prepares to launch new stringent regulations on Wall Street banks.
The Houston Chronicle reports that, "The Federal Reserve is pushing the biggest U.S. banks to shrink so that they're less of a risk to the financial system. In testimony at a Senate hearing Tuesday, Fed Gov. highlighted several proposals that regulators are working on. They include imposing additional capital requirements for the eight largest banks — including JPMorgan Chase, Citigroup and Bank of America — that exceed the levels mandated by international regulators. That means the banks would have to set more cash aside and raise more money to increase their cushions against unexpected losses."
Obama intends to enforce rules that would reguire banks to reduce their financial holdings on a global scale.
According to the Houston Chronicle, "The amount of these "capital surcharges" would increase in proportion to how risky the regulators deem a bank to be, Tarullo told the . That could push them to cut their risk and become less risky to the system. They would have an incentive to shed businesses and get smaller because otherwise they'd have to set aside more capital. Some of the banks have grown bigger since the crisis."
Nevertheless, Obama did not rule out bailing out Wall Street bankers should the need arise again.
To read the entire article from the Houston Chronicle, link here:
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