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Biggest Banks to Face Tougher Debt Limits to End Too-Big-to Fail

  • Basel considers raising minimum capital or requiring buffer
  • Committee seeks feedback on ways to meet new requirements

Global regulators are considering how to raise capital requirements for the world’s biggest banks as they implement tougher debt-financing limits designed to rein in too-big-to fail lenders.

The Basel Committee on Banking Supervision already imposes higher capital ratios on the 30 largest global banks, led by JPMorgan Chase & Co. and HSBC Holdings Plc, based on the riskiness of their businesses. The committee is now seeking feedback on a surcharge to the so-called leverage ratio, which is based on the size of balance sheets, without consideration of risk. The charge could be made a hard minimum requirement that mustn’t be broken, or designed as a buffer, which can be temporarily breached in times of crisis.