Richard Parsons, former chairman of Citigroup Inc., said that the biggest U.S. banks probably need more capital as regulators seek to prevent another financial crisis.
“Stronger capital requirements, increased regulation, I think you’re going to see that wave continue for another couple of years,” Parsons, 65, said in an interview on CNBC today. “Probably the banks should have more capital.”
U.S. regulators have proposed boosting the buffers that the biggest lenders must hold to protect against potential losses, as Wall Street recovers from the 2008 crisis. The plans go beyond rules already approved by international regulators.
“There should be more thoughtful and insightful regulation,” said Parsons, who retired from the Citigroup board last year. “But some of the reasons are just because we, the regulatory establishment, the legislative establishment, we don’t want to be blamed the next time one of these things blows up so let’s just throw the kitchen sink at them.”
New York-based Citigroup almost collapsed in 2008 and took a $45 billion government bailout, which it later repaid. Parsons was a member of the company’s board at the time.