A pair of Democratic and Republican lawmakers have joined
forces to pressure the Federal Reserve to get tougher on Wall Street banks by
requiring financial giants to maintain bigger capital cushions that can help
protect them against losses, politico reports.
In a letter to Federal Reserve Chairman Ben Bernanke, Sens.
Sherrod Brown (D-Ohio) and David Vitter (R-La.) warned that a Federal Reserve proposal
released in December on capital standards “misses a huge opportunity to address
the too-big-to-fail issue.” The
senators, who are both members of the Senate Banking Committee, wrote that they
want the Fed to go beyond the minimum capital requirements laid out in an
international agreement on capital, known as Basel III, and force the largest
U.S. lenders to meet a tougher standard.
“The surcharge on the megabanks should be high enough that
it will either incent them to become smaller or will help to ensure they can
weather the next crisis without another taxpayer bailout,” the senators wrote
in a letter dated Aug. 6. The letter is
further evidence that pleas from large banks, such as JPMorgan Chase, that new
capital requirements go too far are falling on deaf ears across the political
spectrum….
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