A draft bill by Sens. David Vitter, R-La., and Sherrod Brown, D-Ohio, would scrap pending Basel III requirements and instead impose a higher capital standard: 10% for all banks and an additional surcharge of 5% for institutions with more than $400 billion of assets.
The bill's strictest provisions would cover the six largest banks — JPMorgan Chase, Bank of America, Citigroup Inc., Wells Fargo & Co. (WFC), Goldman Sachs Group Inc., and Morgan Stanley. (MS)
Brown has said the goal of the legislation is to take away the "economic advantage the market gives" large banks and to reduce the risk they pose to the financial system. He said support for a too-big-to-fail bill has grown over the last 10 to 12 months.
"I'm confident that support is growing," Brown said in a March 10 interview with Bloomberg Television. "I don't know that we've got the 50 or maybe 60 votes we need yet."
Under Basel III, banks must hold at least 7% of Tier 1 capital against a bank's risk-weighted assets, plus as much as a 2.5% surcharge for some of the world's largest and most complex banks.
