WFC - Stronger capital rules may be coming for the largest U.S. banks

2023-06-05 03:41:19 ET

Big U.S. lenders like Morgan Stanley ( NYSE: MS ) may soon face revised capital rules following the collapse of smaller regional players earlier this year, according to the Wall Street Journal .

Overall capital requirements could be raised by about 20% at institutions with at least $100B in assets, compared to the current $250B threshold that regulators currently reserve for their toughest rules. Credit card giants that are heavily dependent on fee income, such as American Express ( NYSE: AXP ), could also be impacted, as well as those involved in investment banking and wealth management.

Regulators, including the Federal Reserve, FDIC and the Office of the Comptroller of the Currency, are on track to propose the changes as early as this month to boost the resilience of the U.S. financial system.

Michael Barr, the Fed's vice chair of supervision, previously hinted to tougher rules in a Congressional hearing last month that centered on bank regulation. The Federal Reserve has also admitted that its supervisors didn't fully appreciate the extent of the vulnerabilities at Silicon Valley Bank ( OTCPK:SIVBQ ), and didn't take "sufficient steps," as the lender - that has since collapsed - grew in size and complexity.

More on capital requirements

• Federal Reserve to review its oversight of Silicon Valley Bank, led by Michael Barr
• JPMorgan's Jamie Dimon pushes back at higher capital requirements at hearing

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