the Federal reserve introduced new rules that set stress capital buffer (capital buffer stress, SCB) to determine the required reserves of banks to protect against downturns. About it reports Reuters.
the Final rule will combine the capital requirements arising from the annual banking stress tests, the fed, with regular capital standards. This should make it easier for banks prediction of how much they should keep in reserves, and to make these standards more customized for each Bank.
the Staff of the Federal reserve calculated that the final rule will actually result in somewhat higher capital requirements for the largest banks such as JPMorgan Chase and Citigroup, and lower requirements for smaller institutions.
In General, it is expected that major global banks will have to hold on average 7% more loss absorbing capital, while banks with assets of less than $ 700 billion will see a reduction of these requirements by 10%, they concluded.
the Rules will take effect for the round of stress tests of banks in 2020, which will be tested 34 of the Bank. The fed will release the results on June 30.
on Tuesday, the fed announced an emergency rate reduction by 50 basis points to 1-1. 25% to support the economy amid the outbreak of coronavirus. The American Central Bank has lowered the interest rates by half a percentage point for the first time since the end of 2008.