WASHINGTON — Two Federal Deposit Insurance Corp. board members are urging policymakers to strengthen a leverage ratio that would be applied to banks of all sizes before regulators finalize the U.S. version of Basel III rules.

FDIC Vice Chairman Thomas Hoenig and Jeremiah Norton, a director on the agency's board, are both calling for a significantly higher leverage ratio beyond the 4% that was proposed by regulators in June. They argue that the ratio is insufficient to protect the banking system, noting that banks held just 3% in tangible equity to total assets prior to the financial crisis. (The largest banks also face an additional 3% supplemental leverage.)

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