Editorial Board
More Wall Street Leverage Won’t Help Main Street
A solid foundation helps.
Source: GHI-Plexi Images/UCG/Universal Images Group
Like hemlines and hairstyles, trends in bank rules seem to shift with the times.
Just three years ago, regulators suggested that the biggest banks needed about 19% more capital to protect against potential losses. Now, after a furious industry reaction and personnel changes at key agencies, they’re recommending a decrease of some 6% in aggregate, in hopes of reducing complexity and boosting lending. That’s after capital ratios had already started drifting lower.