FDIC Signs Off on Higher Capital Standards for U.S. Banks

The Federal Deposit Insurance Corp. approved new global capital rules and a proposal to boost requirements for U.S. banks above the international standards.

The five-member FDIC board voted 4-1 today for the 3 percent leverage ratio mandated by the international Basel III accord, and unanimously proposed to boost that minimum at eight of the biggest U.S. lenders to 5 percent of assets for parent companies and 6 percent for their banking units.

The FDIC’s action brings the U.S. closer to meeting global agreements on bolstering banks. The 2010 Basel III rules are designed to prevent a repeat of the 2008 crisis that almost destroyed the financial system.

The changes would make lenders fund more assets with capital that can absorb losses instead of with borrowed money. Bankers say this could force asset sales and pinch profit. The Federal Reserve approved the international standard last week.

To contact the reporter on this story: Jesse Hamilton in Washington at jhamilton33@bloomberg.net

To contact the editors responsible for this story: Rick Green at rgreen18@bloomberg.net; Maura Reynolds at mreynolds34@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.