US regulators seek to recalibrate bank capital rules for G-Sibs

Author: John Crabb | Published: 13 Apr 2018

US banking regulators have proposed changes to two individual capital rules for the country’s eight largest banking institutions, as they look to simplify existing rules without affecting activity levels.  

The Office of the Comptroller of the Currency (OCC) has proposed a rule that would extend leverage ratio requirement tailoring to the business activities and risk profiles of the banks. The Federal Reserve, has also requested comment on a proposal to introduce a stress capital buffer (SCB).

The two regulators want to tailor restrictions to the risk posed by G-Sibs

In line with recommendations made by the Basel Committee on Banking Supervision, the proposed changes to the leverage ratio requirements ‘seek to retain a meaningful calibration of the enhanced supplementary leverage ratio standards while not discouraging firms from participating in low-risk activities’.

A stress capital buffer would integrate stress test results with the non-stress capital requirements. The Federal Reserve...