, Columnist
How Much Have Banks Really Cut Their Risks?
Not as much as it might seem.
Looks solid.
Photographer: Spencer Platt/Getty ImagesThis article is for subscribers only.
The Trump administration is looking to ease financial-strength requirements for big banks, on the grounds that they’ve already done enough to avert another crisis. But how much safer have they really become?
In recent posts, I’ve offered some less-than-encouraging evidence. Levels of loss-absorbing equity, although higher than before the crisis, still fall far short of what’s needed. And despite the added equity, the market doesn’t appear to believe that the largest U.S. banks are much healthier than they were a decade ago.