Fed Proposes New, Tougher Rules for Big Banks
By: AP
The Federal Reserve said the largest U.S. banks and financial companies should hold extra cash on their balance sheets to cushion themselves against financial crises.
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The proposal by the chief U.S. banking regulator, made Tuesday, will affect banks with assets over $50 billion in assets.
There are even stricter rules for companies with over $500 billion in assets such as JPMorgan Chase, Goldman Sachs and Citigroup.
U.S. banks opposed the rules. Banks said they would be forced to hold too much extra cash, hampering their ability to make loans.
The rules were first spelled out by international regulators in Basel, Switzerland, and were specifically targeted at large, interconnected, global financial institutions.
The Federal Reserve said the largest U.S. banks and financial companies should hold extra cash on their balance sheets to cushion themselves against financial crises.
