U.S. Regulators Set to Propose Tougher Capital Rules for Big Banks, According to Wall Street Journal

(Reuters) – U.S. regulators are preparing tougher capital rules for big U.S. banks to bolster the soundness of the financial system after a string of defaults, the Wall Street Journal reported on Monday.

According to the new version, banks could see their capital requirements increase by 20%, said the economic and financial daily, adding that the changes planned by the regulators are about to be proposed during the month.

Michael Barr, the Federal Reserve’s vice chairman for oversight, said in mid-May that the institution will present its plan in the summer to strengthen capital rules and ensure that bank supervision by supervisors to be stricter, following the failure of several mid-sized banks in March.

He added that the central bank was “carefully considering” changing the rules for large regional banks.

According to the WSJ, the precise amount of capital requirements will depend on the activity of the establishment, the large banks with a strong presence in trading expected to suffer the most significant increases.

Morgan Stanley but also American Express, which depend heavily on commission income, could also be imposed large capital increases, according to the WSJ.

Asked by Reuters, the two groups did not immediately respond to a request for comment.

(Baranjot Kaur, French version Laetitia Volga, edited by Blandine Hénault)