Source: The American Prospect
by David Dayen
“Lost amid the debate (OK, it’s a story about bank capital, it probably would have been lost anyway) was the Federal Reserve’s announcement that it plans to lessen the burden on big banks to cover their own risk-taking activities. The decision was laid out in a speech on Tuesday by the Fed’s vice chair for financial supervision Michael Barr at the Brookings Institution. The new proposal on bank capital, which once was to be applied to banks with more than $100 billion in assets, will now be limited to banks with more than $250 billion. This is yet another gift to the ‘stadium banks’, which won similar exemptions in the 2018 bank deregulation law, which some have attributed as a cause of the collapse of Silicon Valley Bank. Even Barr argued that inadequate bank capital among such large regional banks was a cause of the spring 2023 collapse. He’s completely reversed himself now.” (09/12/24)
https://prospect.org/economy/2024-09-12-fed-caved-on-bank-capital/