U.S. authorities are forced to take action on some shady dealings up north; the Systemic Risk Council says weaker capital rules could deflate bank equity.
Echoing House members, five Republican senators called on the Federal Reserve Board to rethink its surcharge in order to eliminate “excessive” capital requirements.
The letter from 29 Republicans, including some who may chair the House Financial Services Committee next year, urges the Federal Reserve’s top regulator to ‘recalibrate’ the capital surcharge for banks like JPMorgan Chase and Citigroup.
The central bank has encountered criticism for allowing three banks to direct funds to dividends and buybacks even though their capital levels fell below required minimums.
The president’s signature tax reform law muddled this year’s stress test results, causing several banks to incur greater-than-expected losses and spurring the Federal Reserve to constrain capital distributions at a handful of banks.
