Federal Reserve Vice Chair for Supervision Michael Barr said Monday he is proposing stricter bank capital requirements in light of three major US bank failures earlier this year.
Banks with at least $100 billion in assets would be subject to similar regulation that banks with $700 billion in assets currently face, under Barr’s proposal. These regulations would force banks to hold an additional two percentage points of capital, or an additional $2 of capital for every $100 of risk-weighted assets, Barr said.
“Our recent experience shows that even banks [with at least $100 billion in assets] can cause stress that spreads to other institutions and threatens financial stability,” Barr in remarks at the Bipartisan Policy Center. “The risk of contagion implies that we need a greater degree of resilience for these firms than we previously thought.”