Minimum capital requirements

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 Federal Reserve’s forthcoming rules for banks with assets of $100 billion-$250 billion hinge on their perceived risk to the financial system.

The agency said multiple stakeholders had requested more time to evaluate the proposal.

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.

All 35 banks passed the Federal Reserve's first round of tests, but their results were not as stellar as last year's.

Some continue to doubt there will be a premium cut, while others say there's no telling which way Brian Montgomery will go.

The central bank's rule-writing workload is expected to remain busy for the foreseeable future, thanks in large part to enactment of the recent regulatory relief bill.