Fed proposes banks add cushion

0
859

wpid-fedBuilding-grass

BY 

In their latest bid to reduce the chances of future taxpayer bailouts, federal regulators are proposing that the eight biggest U.S. banks build new cushions against losses that would shift the burden to investors.
The Federal Reserve’s proposal put forward last week means the mega-banks would have to bulk up their capacity to absorb financial shocks by issuing equity or long-term debt equal to prescribed portions of total bank assets.
The idea is that the cost of a huge bank’s failure would fall on investors in the bank’s equity or debt, not on taxpayers.
The Fed governors led by Chair Janet Yellen voted 5-0 at a public meeting to propose the so-called “loss-absorbing capacity” requirements for the banks, which include JPMorgan Chase, Citigroup and Bank of America.
The eight banks would have to issue a total of about $120 billion in new long-term debt to meet the requirements of the proposal, the Fed staff estimates.
“Read the Full Article at www.journalgazette.net >>>>”

Author Details
G M
This is a general posting account for VT
ATTENTION READERS
Due to the nature of independent content, VT cannot guarantee content validity.
We ask you to Read Our Content Policy so a clear comprehension of VT's independent non-censored media is understood and given its proper place in the world of news, opinion and media.

All content is owned by author exclusively. Expressed opinions are NOT necessarily the views of VT, other authors, affiliates, advertisers, sponsors, partners or technicians. Some content may be satirical in nature. All images within are full responsibility of author and NOT VT.

About VT - Read Full Policy Notice - Comment Policy