Fed proposes new bailout rules for biggest banks

SOURCE: Mortgage News Feed

Eight of the country’s largest banks would be required to raise $120 billion to comply with a new rule proposed Friday by the Federal Reserve Board, with the money designated to recapitalize the bank should it fail, lessening the likelihood of a a government bailout. Under the proposed rule, JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), Goldman Sachs (GS), Morgan Stanley (MS), State Street (STT), and Bank of New York Mellon (BK) would be required to meet a new long-term requirement and a new “total loss-absorbing capacity.” According to the Fed, the new requirements would “bolster financial stability by improving the ability of banks covered by the rule to withstand financial stress and failure without imposing losses on taxpayers.”  Read Full Article Here >> 


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